ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb on Wednesday said the foundation for macroeconomic stability has been set with improvement in key indicators including surplus current account; increasing remittances, exports, and foreign exchange reserves, and a decreasing rate of inflation, paving the way for sustainable growth.
Addressing at the Economic Coordination Committee (ECC) of the Cabinet meeting, Aurangzeb provided an overview of the economic landscape based on the latest data, underscored the government’s consistent efforts to implement policies aimed at bolstering economic stability and ensuring sustainable growth.
“The current account has recorded a surplus after nearly 10 years while the export sector is also on the right path and inflation too has come down to record level in six years,” he said.
The finance minister said that remittances are expected to cross $35 billion by the end of current fiscal year compared to around $33.2 billion last year. The policy rate came down to 13 percent, said the minister, adding that was also essential for the economy the confidence of business community had strengthened with the sale of cement increasing by five percent, fertilisers by six percent, automobile by 58 percent and petroleum by 15 percent.
The minister also expressed satisfaction over the surge in foreign exchange reserves of the country, saying that the government will have three-month of import cover by the end of current fiscal year, which is also an important factor for rating agencies when the country was moving towards single B.
Roshan Digital Account has touched $9 billion, recording 31 percent more flows while inflation rate has also declined to 4.9 percent. The minister also said that the KIBOR rate is a little below 12 percent. Large companies are now borrowing at KIBOR minus rates.
The minister shared that industrial participants look at this as a positive development. “Their debt servicing cost has been halved,” he said.
Official statement of the ministry noted that the minister also highlighted the progress made towards economic stability, the continued improvement in various economic sectors, and the government’s firm resolve to maintain and accelerate this momentum. He emphasised that the positive trends observed in economic indicators reflect the effectiveness of the government’s targeted measures and commitment to steering the country towards greater prosperity.
A key highlight of the meeting was the presentation of the most recent Consumer Price Index (CPI) data, which recorded a significant drop to 4.9 percent in November 2024. This represents the lowest level of inflation since April 2018, when CPI stood at 3.96 percent. The current CPI figure marks the lowest in the past 78 months, signaling a positive shift in the country’s inflationary trends. The decline in CPI reflects the government’s success in managing inflationary pressures and restoring price stability, particularly for essential commodities.
The ECC was also briefed on the substantial reduction in the prices of several essential goods and services. Among the items that have seen price drops are wheat flour, chillies powder, diesel, petrol, pulses, onions, basmati rice, electricity charges, sugar, plain bread, tea, soap, chicken, eggs, tomatoes, garlic, firewood, and salt. These reductions are seen as critical measures that have eased the financial burden on the common man and strengthened the purchasing power of the population.
Minister Aurangzeb reiterated that the government remains fully committed to ensuring that the positive trajectory of the economy continues. He emphasised that the government’s fiscal policies, including effective management of public finances, trade, and energy sectors, have contributed significantly to the improvement in these indicators. The minister also reassured the public and business community that the government would remain focused on addressing inflation, stabilising the currency, and improving domestic production.
During the meeting, it was noted that while the country is experiencing a period of economic stability, continued efforts are required to maintain this progress. The government plans to enhance economic diversification, invest in key sectors like agriculture, manufacturing, and infrastructure, and pursue reforms to strengthen the financial system. The ECC also acknowledged the critical role of public-private partnerships in achieving long-term economic growth and job creation.
The meeting reaffirmed the government’s commitment to ongoing reforms and stabilisation measures aimed at ensuring economic growth and improving the living standards of the people. The ECC will continue to closely monitor developments and take proactive steps to safeguard economic stability and foster sustainable growth.
The finance minister expressed optimism that the progress made so far would serve as a foundation for future successes, as the government remains dedicated to building a prosperous and stable Pakistan, the statement noted.
Copyright Business Recorder, 2024