Finance Minister Signals Plan to Bring Interest Rate to Single Digit
Islamabad: Federal Finance Minister Muhammad Aurangzeb has indicated that the government aims to bring the policy interest rate down to a single digit, expressing optimism about Pakistan’s improving economic outlook.
Speaking at the Pakistan Economic Growth Conference held at the Federation of Pakistan Chambers of Commerce and Industry, the minister said his private-sector experience enables him to better understand the concerns of the business community while serving in government.
Referring to the 2022 floods, he noted that Pakistan had sought assistance from the international community at the time. However, due to the country’s relatively stable economic position during the recent floods, the prime minister did not consider it necessary to make an international appeal.
Aurangzeb said Pakistan successfully made a $500 million Eurobond payment in September and would now shift focus from economic stabilization to growth. He added that engagement with the International Monetary Fund continues as part of broader economic reforms, while large-scale manufacturing has recorded 10 percent growth.
The finance minister projected the country’s growth rate to reach between 1.5 and 1.75 percent and said exports had been maintained despite challenges. He assured the business community that their proposals would be considered in policymaking, emphasizing the need for collaboration to address issues arising from rapid population growth.
He stated that the government views the business community as a partner and would strive to incorporate received recommendations into policy, even if implementation takes more than a year.
Aurangzeb also revealed that he has not drawn a salary for the past two years and has paid the super tax as per the Supreme Court’s decision. He reiterated his commitment to reducing the interest rate to single digits.
The minister remarked that the government cannot provide jobs to all 240 million citizens, stressing the need for private-sector-led growth. He said foreign exchange reserves are steadily increasing and that Pakistan’s economy is moving toward stability and growth. Efforts are underway to expand the tax net and support the construction sector.
He further acknowledged issues faced by developers and bankers, particularly regarding recoveries, adding that the prime minister would address the matter in the coming days.
Aurangzeb noted that cement production is rising and that taxes in the construction sector are increasing. He claimed that Pakistan’s IT exports are generating around $10 million, while additional funds are reportedly leaving the country through informal hundi and hawala channels.
