Aurangzeb says Pakistan plans to increase revenue to 1.5 percent of GDP in fiscal year 2025 and 3 percent in the next three years.
On Monday, Finance Minister Muhammad Aurangzeb updated representatives of Fitch Ratings on Pakistan’s recent Staff Level Agreement (SLA) with the International Monetary Fund (IMF) and outlined various measures to boost the economy.
The briefing conducted via Zoom highlighted the positive impact of the nine-month standby agreement with the IMF on Pakistan’s economic health.
Earlier this month, the IMF announced an SLA with Pakistan for a $7-billion, 37-month loan program designed to promote stability and inclusive growth.
The new Expanded Fund Facility (EFF), pending IMF Executive Board approval, also requires “timely confirmation of necessary financial assurances from Pakistan’s development and bilateral partners.”
During the virtual meeting, Aurangzeb told Fitch representatives that Pakistan plans to grow revenues by 1.5 percent of GDP in fiscal 2025 and 3 percent in the following three years. They also projected a primary surplus of 1% of GDP for FY2025.
Pakistan’s Finance Minister Mohammed Aurangzeb highlighted Pakistan’s $9.4 billion foreign exchange reserves, strong stock market performance, and CPI inflation at 12.6 percent for June 2024. He also noted a 7.7 percent increase in foreign remittances.
Discussing fiscal reforms, Finance Minister Aurangzeb emphasized the government’s efforts to broaden the tax base, reporting a substantial 30% increase in tax collection in fiscal year 2024 over the previous year. More than 150,000 retailers have registered as taxpayers for the first time, he said.
“IT sector exports have crossed USD 3 billion,” Aurangzeb reiterated the government’s commitment to improve the tax-to-GDP ratio as part of ongoing fiscal consolidation efforts.
Discussing fiscal reforms, Finance Minister Aurangzeb emphasized the government’s efforts to broaden the tax base, reporting a substantial increase of 30% in tax collection in fiscal year 2024 compared to the previous year.
Aurangzeb informed Fitch of his confidence that multilateral institutions were financing Pakistan’s projects. Fitch Ratings representatives acknowledged the improvement in the country’s economic indicators and appreciated the ambitious targets and fiscal measures adopted by Pakistan.
The meeting was led by Fitch Ratings Senior Director Thomas Rookmaker and Directors Asia Pacific Sovereign Krisjanis Krustins and Jeremy Zook, and attended by senior officials of the Ministry of Finance.