Pakistan Finance Minister Touts Economic Progress, Seeks IMF Bailout Extension

Pakistan's Finance Minister, Muhammad Aurangzeb, painted a picture of a stabilizing economy during his visit to Washington. He addressed the Atlantic Council, highlighting positive trends in GDP growth, particularly within the agriculture sector (5%) and the services sector.

Aurangzeb claimed significant progress has been made this year. Pakistan successfully completed an IMF program, and discussions with IMF officials regarding a potential loan extension program were positive. He attributed the improved economic situation to a decrease in inflation from a high of 38% to around 20%, along with a stable exchange rate.

The Finance Minister acknowledged the need for further reforms. He emphasized plans to discuss a loan extension program with the IMF. He proposed leveraging his private sector experience to achieve economic stability.

Aurangzeb stressed the importance of increasing tax collection, acknowledging the current 10% tax-to- GDP ratio is insufficient. He advocated for raising it to 15%, along with a similar increase in investment-to-GDP ratio.

The Minister identified digitization as crucial for achieving transparency in the tax system. He spoke about the need to rebuild trust with domestic actors and expand the tax net to include previously untaxed sectors.

Beyond the IMF discussions, Aurangzeb met with the US Pakistan Business Council delegation to explore opportunities for foreign investment in Pakistan's agriculture, IT, mining, and energy sectors. He also held a separate meeting with the Secretary-General of the Climate Vulnerable Forum to discuss the Climate Vulnerable Fund at COP 28.