Federal Minister for Finance Muhammad Aurangzeb assured international investors that the government will not let go of focus on ensuring structural reforms.
Aurangzeb made these remarks while talking to a group of investors led by Barclays, who called on the Minister at Finance Division on Tuesday.
As per the statement, foreign investors led by Barclays investors expressed their appreciation for the way “things have started looking up in Pakistan”.
They also appreciated the structural reforms and stability visible in different sectors of the economy and evinced keen interest in exploring opportunities for participating in the growth of Pakistan’s economy through investment and business collaborations, the Finance Division said.
Aurangzeb calls for ‘leveraging’ economic gains to ensure permanent stability
Meanwhile, Aurangzeb assured investors that the government is focused on ensuring that Pakistan stays on the course of structural reforms in core sectors of economy, including energy, state-owned enterprises (SOEs), privatisation, taxation and rightsizing of government.
As per the Finance Division, the finance minister said Pakistan, in the past, has been seen as a “single-tranche country but the time has come to remove this perception and implement the structural benchmarks agreed upon under the programme with the International Monetary Fund (IMF) to ensure permanence to the macroeconomic stability”.
Aurangzeb briefed the delegation on policy interventions and initiatives implemented during the last 12 months to reform the economy and also gave them an overview of the growth and macroeconomic stability in key economic indicators, including twin deficits, stable currency, foreign exchange reserves, and inflation that remained “a big story throughout the year”, the statement added.
He said the current macroeconomic stability was an outcome of a successful conclusion of nine-month IMF Stand-By Arrangement (SBA) paved the way for a larger and longer EFF to bring permanence to the macroeconomic stability and implement structural reforms.
Aurangzeb highlighted a positive outcome of the macroeconomic stability for Pakistan was its ability to not only clear the Letters of Credit (LCs) and import backlogs by May and June last year, but also clear the payments of profits and dividends close to $2 billion to foreign investors.
Purchasing property, car: Non-tax filers to face restriction: Aurangzeb
The finance minister was of the view that the new fiscal year had started on a clean slate and noted the continuation of macroeconomic stability in the first quarter with current account deficit remaining under control due to strong remittances, healthy RDA flows, and exports showing positive trends in terms of diversification and a higher delta in IT exports and services as per August figures.
Aurangzeb also referred to credit upgrades by the international credit rating agencies and shared plans to access the international capital markets.
“The government had sent some powerful signals to the local market by scrapping some bank auctions to convey the message that it was under no desperation to borrow and it would only borrow at more palatable rates,” he said.
The minister told the delegation that the government wanted banks to start lending to the private sector on impersonal terms and also mentioned the incentives offered to banks in the budget this year for increasing their micro-lending to the private sector, particularly agriculture, IT ecosystem and the SME sector.
He also briefed the delegation about various steps and measures taken by the government to demonstrate its seriousness in implementing the reforms agenda, including the signing of a National Fiscal Pact between the federation and its four units to implement reforms in various sectors.
“The government’s vision was simple and it was to let the private sector lead the growth with policy framework and continuity provided by the government,” he said.
To a question, the finance minister noted a big drop in the inflation figures, from a 38% high last year to a 44-month low of 6.9% in September this year, was a strong marker of economic recovery.