Islamabad, October 8, 2024 – Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, announced on Tuesday that a single-day nationwide protest could inflict a staggering Rs 190 billion loss to Pakistan’s economy.
During a press briefing, Aurangzeb disclosed that the Ministry of Finance’s Economic Wing had meticulously assessed the economic impact, considering key sectors like gross domestic product (GDP), tax revenue, law enforcement, and foreign investment, among others.
The minister detailed that the comprehensive evaluation accounted for disruptions in business activities, exports, and a significant slump in foreign direct investment inflows. He further highlighted the strain on public resources, citing escalated law enforcement expenditures as the government sought to maintain peace amidst widespread unrest.
Aurangzeb revealed that sectors involving the informal workforce, such as street vendors, taxi drivers, and daily wage earners, faced severe disruptions, with nearly 0.8 million people in Islamabad alone experiencing hardship over the past 2-3 days. Essential services, including healthcare, construction, and public transportation, also bore the brunt of the protest.
Pakistan’s GDP currently stands at Rs 124 trillion, with second-quarter projections reaching Rs 32 trillion. Using this benchmark, the Economic Wing estimated the colossal financial damage caused by the single-day strike. Aurangzeb emphasized that while the government had shifted its focus from stabilizing the economy to fostering growth, such protests threaten these efforts and undermine economic recovery.
In addressing the broader economic outlook, the minister expressed optimism regarding Pakistan’s macroeconomic stability. He noted that the country’s foreign reserves had swelled to $10.7 billion following the latest tranche from the International Monetary Fund (IMF), providing a much-needed cushion against external shocks. Additionally, inflation has dropped to a 44-month low of 6.9%, with all major inflation indicators—headline, core, and average inflation—entering single digits.
Aurangzeb also hinted at a possible reduction in the policy rate in the upcoming State Bank of Pakistan (SBP) monetary policy meeting, further stabilizing the financial environment. The Karachi Interbank Offered Rate (KIBOR) had already fallen below expected levels, a key indicator of improved market confidence. Moreover, the government’s reduced borrowing had eased debt servicing costs, enabling banks to extend more credit to the private sector.
The finance minister urged citizens to refrain from actions that could harm the economy, stressing the government’s commitment to achieving sustainable growth and consolidating Pakistan’s economic standing. He also condemned a recent terrorist attack on Chinese nationals, extending condolences to the Chinese government and reinforcing the importance of maintaining security for foreign investments.
In concluding remarks, Aurangzeb underscored ongoing negotiations with power companies, aimed at re-profiling debt and extending tariff reductions—a move that could provide further economic relief to citizens amidst the current challenges.