Finance Minister: By June, foreign exchange reserves will total $10 billion

Finance Minister Muhammad Aurangzeb offered a ray of optimism on Tuesday, stating that the nation’s foreign exchange reserves will exceed $10 billion by June of this year, as the government moves quickly to solve the grave economic conditions that now exist.

At the 2024 Islamabad Business Summit, Aurangzeb stated, “The nation’s foreign exchange reserves have increased […] and will reach $10 billion by June [this year].”

The finance czar emphasized the necessity of energy sector reforms and the importance of “essential” privatization of businesses that generate losses.

Regarding the matter of the nation requesting a further bailout program from the International Monetary Fund (IMF), the finance minister called it “essential” and mentioned that contacting the Washington-based lender is sometimes a nation’s “last resort.”

His comments coincide with Islamabad’s official request to the IMF, made a few days ago, for a new rescue package under the Extended Fund Facility (EFF) with potential for augmentation through climate funding. The package was to be valued at between $6 and $8 billion.

A day earlier, the FinMin said in an interview with The National that the IMF has been quite accommodating when it comes to agreeing to take a closer look at a lengthier, more comprehensive program.

But the precise scope and duration won’t be decided upon until May 2024, when a consensus has been reached on the main features of the upcoming program.

Pakistan has expressed interest in the EFF program and requested that an IMF review team be sent in May 2024 to finalize the specifics of the next three-year bailout package.

The IMF stated that Pakistan’s external buffers deteriorated, primarily reflecting ongoing debt service, including Eurobond repayments, in its most recent Regional Economic Outlook (REO), released by the Middle East and Central Asia (ME&CA) department, despite the fact that Pakistani authorities are painting a positive picture of the country’s economy.

GDP will expand by 2.6% by 2024.

In response to a question on what the current fiscal year could hold for Pakistan, Aurangzeb stated that 2.6% GDP growth is anticipated in FY2024.

In addition to setting goals to maintain the current account and budget deficits within manageable bounds, the government is actively seeking out foreign investment.

He recalled Islamabad’s attempts to control inflation and pointed out that while the current account deficit (CAD) has decreased, tax collection has improved as a result of government activities.

The minister stated, “The CAD has been reduced to $1 billion after a 74% reduction in the FY24,” and added that it is anticipated that the current fiscal year’s inflation rate will stay at 24%.

In addition, he noted that the trade imbalance has decreased by 24.9% to $17 billion.

The nation now has larger foreign exchange reserves. The minister stated that the stock market in Pakistan is at its best point ever.

He said that efforts have been made to enhance the performance of the agriculture sector, which is growing at a pace of 5%.

Speaking about the increased revenue generation, Aurangzeb stated that the Federal Bureau of Revenue (FBR) has exceeded its target of Rs6.707 trillion for the current fiscal year by a noteworthy 30.2% rise in tax collecting.