ISLAMABAD: Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb here Tuesday expressed the hope that the positive development in various economic indicators may lead to a sovereign rating upgrade to single B category for the country.
Speaking at “Dialogue on the Economy”, organized by the Pakistan Business Council (PBC) here, the federal minister said inflation has receded while State Bank of Pakistan (SBP) has further reduced policy rate, resultantly Kibor rates would come down for the benefit for industry.
He said, the country’s foreign exchange reserves have reached a milestone of $13 billion, sufficient to cover three months of imports.
“This is important milestone that we have and if all goes well, this is a critical figure for the economy and sovereign being rerated to a single B category,” he said adding “there are many other aspects, which of course rating agencies consider, but I think this is one of the critical factors and we are moving in that direction with very strong remittance flows, IT services exports and diversification of exports etc.”
He said the government was moving on right direction to strengthen remittance inflows and promote export-led growth. He said, Foreign Direct Investment (FDI) was important part of country’s roadmap to go forward adding that every FDI which comes in has to have the element of exportable surplus to move towards export-led economy.
Talking about World Economic Forum (WEF) energumens, he said, lot of constructive discussion and engagement were held with bilateral partners, banks, IMF etc on variety of themes including trade, tariff, Artificial Intelligence, digitalization and new world order.
The minister added, in a departure from traditional budget planning, the government has introduced a more inclusive and transparent process. As part of this new approach, the process has been started in January instead of April and all government departments have been asked to present their budgets, while forums like the PBC and various chambers have been invited to provide inputs.
He said, the government stays committed to its medium-term program with International Monetary Fund (IMF), a three-year plan that outlines key economic objectives.
The minister said, the government wanted to make sure to get the economy moving as has been done for stabilization. However, he added there was not any automatic switch from stabilization to growth. We need to fundamentally change the DNA of our economy to avoid the boom and bust cycle that has inflicted losses in the past, he added.
He said, the IMF programme was actually need of the hour and we need to make conscious decisions about taxation, energy, privatization, and public finance to ensure we don’t get into trouble again.
In a bid to streamline tax administration and enhance revenue collection, the government has taken a significant step by shifting policy-making powers from the Federal Board of Revenue (FBR) to the Ministry of Finance.
This strategic move aims to enable the FBR to focus solely on its core function of tax collection, thereby improving efficiency and productivity, he added.
