By Staff Reporter
ISLAMABAD: Finance Minister Muhammad Aurangzeb held a virtual meeting with Fitch Ratings on Monday, discussing the country’s economic performance and fiscal reforms, the ministry said.
Aurangzeb briefed the ratings agency on Pakistan’s successful completion of its 9-month IMF program, which has boosted foreign exchange reserves to $9.4 billion and improved macroeconomic indicators.
Fitch Ratings led by senior director Thomas Rookmaker, directors Asia Pacific Sovereign . Krisjanis Krustins and Jeremy Zook. The meeting was also attended by senior officials of the finance ministry.
“He (minister) highlighted Pakistan’s foreign exchange reserves reaching $9.4 billion, robust stock exchange performance, and CPI inflation at 12.6 percent in June 2024,” the ministry’s statement added.
The minister noted a 7.7 percent rise in foreign remittances.
Aurangzeb emphasized the government’s efforts to broaden the tax base, citing a substantial 30 percent increase in tax collection during FY 2024. “Furthermore, more than 150,000 retailers have registered as first time tax payers. The IT exports crossed the figure of $3 billion.”
He reiterated the government’s commitment to further improve the tax-to-GDP ratio as part of ongoing fiscal consolidation measures.
The discussions encompassed ongoing reforms in the energy sector and state-owned enterprises, including privatization and rightsizing of government entities to streamline operations and improve governance.
Aurangzeb informed the rating agency about multilateral institutions’ confidence in financing Pakistan’s projects and briefed them about Pakistan’s Staff-Level Agreement (SLA) finalized in July 2024 with the IMF for a new medium-term program aimed at bolstering the country’s homegrown economic reform agenda.
“The minister apprised the Fitch representatives of salient features of the new programme which includes setting a target of increasing our revenues by 1.5 percent of GDP in FY 2025 and by 3 percent over the coming 3 years. A primary surplus of 1 percent of GDP will also be achieved for FY 2025.”
The representatives from Fitch Ratings appreciated the ambitious targets and fiscal measures adopted by the government and acknowledged the improvement in economic indicators.
In a separate meeting, the Cabinet Committee on State-Owned Enterprises (CCoSOEs) chaired by Aurangzeb considered summaries presented by different ministries/divisions for the categorization of their relevant SOEs as strategic/essential or otherwise.
The committee decided that National Insurance Company Limited (NICL), State Life Insurance Company Limited (SLICL), and Pakistan Re-Insurance Company Limited (PRCL) did not meet the criteria for strategic or essential SOEs and would not be categorized as essential for the public sector.
“The ministry of commerce was further directed to explore Public Private Partnership model for the Pak Expo Company,” a statement said.
The committee also approved the proposal for renaming and restructuring STEDEC as Indigenous Research and Development Agency (Pvt) Limited (IRADA) and directed the constitution of its board and operationalization of the entity by December 2024.
Additionally, the committee approved proposals for the appointment of candidates as independent directors on the boards of PIA Holding Company Board, Pakistan Postal Services Management Board (PPSMB), and Postal Life Insurance Company Limited (PLICL).
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