Finance Minister Muhammad Aurangzeb. Photo courtesy Ministry of Finance
Finance Minister Muhammad Aurangzeb on Tuesday claimed the country’s foreign exchange reserves would climb to $10 billion by June this year, as he reiterated the dire need for economic reforms to achieve prosperity.
“The country’s foreign exchange reserves have increased … will reach $10 billion by June,” he told the 2024 Islamabad Business Summit. “Pakistan’s stock market is at the highest level in history,” he noted, adding the government had taken steps to improve the performance of the agriculture sector [beyond its existing] growth rate of 5 percent.”
Referring to revenue generation, he said the Federal Bureau of Revenue (FBR) had increased its tax collection by 30.2% this fiscal year, surpassing its Rs. 6.707 trillion target. On reforms, he said they were necessary for the energy sector. Additionally, he stressed, it was essential to privatize loss-making state-owned enterprises.
Discussing the country’s plans to seek an extended facility from the International Monetary Fund (IMF), the minister said it was “crucial,” while noting the global lender was often the “last option” for any country. Pakistan hopes to secure a $6-8 billion bailout from the IMF under the Extended Fund Facility, with the country already informing the lender of its intent during meetings earlier this month. Aurangzeb has previously said he hopes to finalize the contours of the upcoming program by end of May, adding Pakistan is aware of the reforms it needs to undertake and is not looking for new policy directives.
During his address, the finance minister said he expected gross domestic product (GDP) growth in the current fiscal to reach 2.6%. He said the government was working to attract foreign investment, and has set targets to curb any surge in the current account and fiscal deficits. He noted a significant reduction in the current account deficit (CAD) this year compared to the last. “The CAD has been reduced to $1 billion after a 74% reduction in FY24,” he said, while noting inflation was forecast to remain 24 percent during this period.
The current account, according to data issued by the State Bank of Pakistan (SBP), posted a nine-year-high surplus in March. A month earlier, the central bank had recorded a surplus of $98 million; the March surplus, however, was recorded at $619 million, the highest since $801 million in February 2015.
The data also showed that the CAD had reached $805 million in the first nine months of the ongoing fiscal, compared to $4.313 billion last year.