Finance minister hints at further reduction in policy rate

ISLAMABAD (Dunya News) – Federal Finance Minister and Senator Muhammad Aurangzeb on Wednesday stated that the country's debt has increased by 41 percent, but the situation will improve with repayments as more steps are being taken in the current fiscal year to improve the economy.

Addressing a ceremony at the Islamabad Chamber of Commerce here, the minister said that the economy has stabilised over the past one and a half years, and all economic indicators were showing positive trends.

A significant reduction has been made in the policy rate, he said, adding that further rate cuts were expected.

He said that the Pakistan Stock Exchange has reached its highest level in history, which reflects investor confidence in the market. There has been a significant increase in the number of new investors.

"I acknowledge that the 41% increase in national debt is substantial, but as repayments continue, the situation will improve." 

The minister said that the government was implementing an agenda of fundamental reforms. A policy of rightsizing has been adopted to reduce government expenditures, and the process was ongoing in over 400 departments.

Aurangzeb said that traders play a key role in the national economy. The privatisation of state-owned enterprises will accelerate this year. Minister of Energy Awais Leghari and his team has done notable work to improve the energy sector. For the first time in 78 years, tariff reforms have been initiated. A task force has been working to reduce electricity tariffs.

The finance minister stated that the entire tax burden cannot be placed on salaried individuals. Agricultural income has been brought into the tax net. As much tax relief as possible has been given to salaried individuals based on available fiscal space.

He said that the digitisation process of the Federal Board of Revenue (FBR) is ongoing, and the prime minister himself is overseeing the reform process in the FBR. Due to our correct direction, business confidence is growing. International financial institutions have appreciated Pakistan’s economic reforms. Global rating agency Fitch has upgraded the country’s rating. A third global agency is also expected to announce its rating about Pakistan soon, he added.

He stated that after tariff negotiations with the US, export opportunities for Pakistan have increased. Economic achievements on the external front have also boosted domestic confidence in the economy.