Islamabad, September 20, 2024 – Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, announced on Friday that Pakistan is expected to receive favorable news from the International Monetary Fund (IMF) on September 25, 2024.
This significant development comes as the IMF’s executive board prepares to meet on that date to deliberate on Pakistan’s $7 billion loan program.
The finance minister, while chairing a meeting of the Economic Coordination Committee (ECC) of the Cabinet, informed attendees about the upcoming IMF board meeting. He emphasized that the nation should anticipate positive news regarding the much-anticipated loan program, which would provide critical support to Pakistan’s economic recovery efforts.
During the ECC meeting, Aurangzeb provided a detailed update on Pakistan’s current economic situation, highlighting the macroeconomic stability achieved across various sectors. He reported that the country’s foreign exchange reserves had risen to a 26-month high, bolstered by “resilient and strong remittance flows.” This improvement in reserves, he noted, had contributed to a stable currency, giving the government more room to navigate economic challenges.
He also pointed to the strong performance of Pakistan’s Information Technology (IT) sector, which has seen consistent monthly exports of $300 million. This steady figure, according to Aurangzeb, is great news for the country’s export sector, reflecting the government’s push to diversify its export base. Additionally, the minister lauded the increase in Roshan Digital Account (RDA) inflows, which reached $165 million last month, further boosting confidence in Pakistan’s financial health.
Aurangzeb stressed that the reduction in inflation, which had fallen to single digits, was another significant achievement for the government. He expressed optimism that inflation would decline even further once the September data is released. The Current Account also presented encouraging signs, with the minister highlighting a $75 million surplus in August. He credited softer oil prices, a weaker U.S. dollar, and an aggressive policy rate cut of 450 basis points (bps) for helping improve the current account position.
The finance minister emphasized that the government’s rejection of all bids for treasury bills earlier this week was a strategic move to signal confidence in the economy. By refusing to borrow under unfavorable terms, the government demonstrated its lack of desperation for financing. Aurangzeb urged banks to redirect their focus toward lending to the private sector, especially given the recent rate cut, which would ease borrowing costs and reduce the government’s largest expenditure—debt servicing. The minister expressed hope that this move would allow the banking sector to lend more aggressively to businesses, fostering economic growth.
Looking ahead to the IMF board meeting, Aurangzeb credited the expected positive outcome to the efforts of Prime Minister, bilateral partners, local teams, and government institutions. He underscored that macroeconomic stability was not an end in itself but rather a foundation for broader economic growth. The finance minister reiterated the government’s commitment to ensuring gradual stability in micro sectors as well, using macroeconomic stability as a stepping stone.
The ECC meeting, attended by key ministers and senior government officials, also addressed other important economic issues. One key agenda item involved approving the export of 40,000 metric tons of sugar to Tajikistan. The ECC approved the proposal in principle, pending final discussions with Tajik counterparts. The Ministry of Industries and Production, in collaboration with the Trading Corporation of Pakistan (TCP), will oversee the final sale agreement. Additionally, the ECC approved another proposal to export 0.100 million metric tons of surplus sugar, noting that domestic stocks were sufficient to meet demand through January 2025.
In another major decision, the ECC approved a Technical Supplementary Grant of Rs 456.6 million for the construction of women’s facilities in the tribal districts of Khyber Pakhtunkhwa (South). The funds will be disbursed to HQ Frontier Corps (FC) in D.I. Khan as part of the government’s ongoing efforts to enhance infrastructure in the region.
As Pakistan awaits the IMF decision on September 25, the government remains confident that continued economic reforms, coupled with strategic fiscal policies, will pave the way for sustained economic recovery.
