Pakistan Will Not Return to Boom-and-Bust Economic Cycle, Says Finance Minister Muhammad Aurangzeb
ISLAMABAD: Federal Finance Minister Muhammad Aurangzeb has said that Pakistan has achieved economic stability as a result of difficult economic decisions and that the government will ensure the country does not fall back into a cycle of economic boom and bust.
Addressing a ceremony in Islamabad, Aurangzeb said the government’s objective was to move from economic stability toward sustainable economic growth. He emphasized that the process of structural reforms must continue to achieve this goal.
The finance minister said tax collections by the Federal Board of Revenue (FBR) had increased significantly, with FBR revenues rising by 40 percent over the past few years. He said the tax-to-GDP ratio had also increased from 8.8 percent to 10.3 percent.
Similarly, the overall fiscal deficit had declined from 12.5 percent to 2.6 percent, he added.
Aurangzeb said the government was providing facilities to promote investment and that it was essential to enable the private sector to play a more effective role in leading the country’s economy.
He said mobilizing private-sector capital was crucial for economic growth, while public-private partnerships (PPPs) and privatization could create additional investment opportunities.
The finance minister said transparency, efficiency and investor confidence would remain priorities in the privatization process. He added that the PPP model needed to be made more effective to increase private investment in infrastructure and public service projects.
Aurangzeb said the short-term target was to increase the tax-to-GDP ratio to 11 to 12 percent.
He said Pakistan’s IT services exports stood at $4.6 billion during the last fiscal year, with freelancers contributing $1.6 billion. The country’s merchandise exports, meanwhile, remained around $30 billion, although further efforts were needed to expand the sector.
The finance minister said reforms were also continuing in the energy sector, state-owned enterprises, taxation and privatization.
He reiterated that the government would focus on consolidating economic stability and implementing structural reforms to put Pakistan on a path of sustainable and long-term economic growth.
