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Federal Finance Minister Muhammad Aurangzeb has expressed optimism that Pakistan is expected to receive $1 billion from the International Monetary Fund (IMF) under the climate fund. To discuss this initiative, an IMF delegation is scheduled to visit Pakistan on February 24.
During an informal conversation with journalists in Islamabad, the finance minister highlighted that the country’s current account has remained in surplus during the first seven months of the ongoing fiscal year. He further revealed that the IMF’s second mission will visit Pakistan in March for a semi-annual review. Assuring that everything regarding the IMF program is on track, he emphasized the need for cautious economic growth to prevent instability.
Aurangzeb pointed out that, so far, only one month in the current fiscal year has witnessed a current account deficit, while the overall current account for the first seven months has remained in surplus. He stressed the importance of careful economic planning to avoid falling back into the boom-and-bust cycle.
He underscored the necessity of structural reforms, stating that they are essential for fixing the “economic DNA” of the country. Without such reforms, sustainable economic improvement would be challenging.
Reflecting on a recent interview with Bloomberg, the finance minister reiterated that Pakistan would be able to meet its revenue targets for the year without placing additional burdens on existing taxpayers.
Speaking at the AlUla Conference in Saudi Arabia, Aurangzeb asserted that Pakistan is moving in the right direction. He explained that any revenue shortfalls would be addressed by broadening the tax net and ensuring stronger compliance, rather than imposing new taxes.
He also acknowledged that a key condition of Pakistan’s $7 billion loan agreement with the IMF is to increase the tax-to-GDP ratio, which is crucial for stabilizing the struggling economy and managing the country’s rising debt. Expressing confidence in fulfilling this requirement, he noted that Pakistan’s tax-to-GDP ratio stood at 10.8% at the end of December, surpassing the target of 10.6%. Concluding his remarks, Aurangzeb reassured that no new revenue measures would be introduced for the fiscal year ending in June, reaffirming the government’s commitment to achieving economic stability without additional financial strain on taxpayers.
