ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb reaffirmed the government’s commitment to enhance the tax-to-GDP ratio as part of ongoing fiscal consolidation efforts
He was speaking at a Zoom meeting with Fitch Ratings representatives led by Senior Director Thomas Rookmaker, and attended by Asia Pacific Sovereign Directors Krisjanis Krustins and Jeremy Zook.
Discussions centered on ongoing reforms in Pakistan’s energy sector and State-Owned Enterprises (SOEs), including privatization and rightsizing of federal entities to streamline operations and enhance governance.
The Minister briefed Fitch about multilateral institutions’ confidence in financing Pakistan’s projects and highlighted the Staff-Level Agreement recently reached with the IMF for a new medium-term program.
This program aims to bolster Pakistan’s economic reform agenda, targeting a 1.5 percent increase in revenues as a share of GDP by Fiscal Year 2025 and achieving a primary surplus of one percent of GDP in the same year.
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Muhammad Aurangzeb provided updates on Pakistan’s economic landscape, noting the successful conclusion of the 9-month Stand By Arrangement with the IMF and its positive impact on macroeconomic indicators.
He highlighted foreign exchange reserves reaching $9.4 billion, robust stock exchange performance, and 12.6 percent CPI inflation last month, along with a 7.7 percent increase in foreign remittances.
Regarding fiscal reforms, the Minister emphasized efforts to broaden the tax base, with a notable 30 percent increase in tax collection compared to the previous fiscal year and over 150,000 retailers registering as taxpayers for the first time. Additionally, Pakistan’s IT exports surpassed $3 billion.
Fitch Ratings representatives appreciated Pakistan’s ambitious targets and fiscal measures, acknowledging improvements in economic indicators underlined during the meeting.
