Pakistan achieves macroeconomic stability, moving to attain economic goals: Finance Minister

WASHINGTON: Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb on Thursday said that Pakistan has achieved macroeconomic stability and now the country’s economy is moving towards attaining its economic goals.
Aurangzeb expressed these words with the Agence France-Presse (AFP) while leading Pakistan’s delegation to the annual meetings of the World Bank and International Monetary Fund (IMF) headquarters in Washington.
He has touted progress on the country’s current account deficit and the stabilization of the Pakistani rupee, which has depreciated against the US dollar by about 65 percent since 2020.
“In May and June on the back of this macroeconomic stability and building up on our reserves, we paid more than $2 billion to our existing international investors,” he said.
Aurangzeb said Pakistan had been behind on existing profit and dividend repayments when the current government took office, and had taken steps to remedy that after making progress on macroeconomic stability.
The finance minister said that alongside privatizing state-owned enterprises (SOEs), Pakistan’s IMF deal also rests on increasing its tax base, and reforming of the country’s power sector.
Aurangzeb told AFP there was a common theme between all three major issues.
Pakistan is hoping to finalize the delayed privatization of its flag carrier and the outsourcing of Islamabad’s international airport in November, the minister said.
During a previous interview with AFP in April, Aurangzeb had said he hoped the privatization of the government-owned Pakistan International Airlines (PIA) could be completed by June 2024.
The finance minister said the five-month delay was down to two factors: ensuring macroeconomic stability, and doing the proper due diligence of the interested parties.
“The reality is, when any foreign investor comes in, or even the local investor, who is going to put in a substantial amount of money, they want to ensure that the foundation is there,” he said, referring to macroeconomic factors.
Aurangzeb noted that potential bidders for both PIA and Islamabad airport also required scrutiny, another factor in the delay.
“Therefore it’s ultimately the cabinet which approved the extension in the timelines so people can do their due diligence before they make these submissions,” he said.
The country came to the brink of default last year as the economy shriveled amid political chaos following catastrophic 2022 monsoon floods and decades of mismanagement, as well as a global economic downturn, he said.
The minister said that inflation peaked at 38 percent, but has since dropped to less than seven percent, after the central bank maintained sky-high interest rates, amid other government tightening measures, including import bans to preserve foreign exchange.
Last month, the IMF approved a $7 billion loan, Pakistan’s 24th such payout from the multilateral lender since 1958, he said.
According to the IMF, Pakistan’s gross public debt currently stands at 69 percent of GDP, or roughly $258 billion.