Finance Minister Muhammad Aurangzeb. Photo courtesy Ministry of Finance
Finance Minister Muhammad Aurangzeb on Monday said Pakistan requires two to three years to implement structural reforms prescribed by the International Monetary Fund (IMF), adding the country doesn’t need more policy advisories.
Appearing at the Atlantic Council think-tank in Washington, where he is currently on an official visit, he maintained that Pakistan is well aware of what is required to improve its economy. “It’s time for us to actually start moving the execution of these aspects and why we’re looking for a larger and extended program, so once we get into the execution we will need a two to three-year time period to go through the structural reforms,” he said.
Acknowledging that Pakistan would have no choice but to proceed to another IMF program after the one it is currently seeking if it doesn’t implement structural reforms, Aurangzeb said his visit was aimed at agreeing on priorities with the global lender. However, he added, these were just preliminary discussions.
On Pakistan’s prevailing economic outlook, he said the country had started this year in much better shape than last year, adding this was primarily a result of the $3 billion Stand-By Arrangement (SBA) program. He said the overall GDP was moving in the right direction, with agriculture and the services sector doing well, adding inflation had declined from a peak of 37-38% and the exchange rate had stabilized.
“Now we need permanence in the macroeconomic stability hence the discussion with IMF on a larger and extended program. We are also going to be focused on the growth aspects of it because when you are talking to Fund or you are in a Fund program, it’s only about stabilization,” he stressed.
On Pakistan’s budgetary deficit, the finance minister said the government would bring under-taxed and untaxed sectors into the net. Similarly, he said, Pakistan needed to fully digitize its taxation and minimize human intervention. “It’s not just about revenue, it’s about transparency and client experience which is going to bring trust and confidence back into the tax authority,” he said.