Pakistan's Economy on Path to Stability, Says Finance Minister Muhammad Aurangzeb
Pakistan's economy is showing signs of stability, said Finance Minister Muhammad Aurangzeb, citing the removal of structural barriers and improvement in economic indicators. The government's steps have begun yielding results, with positive indicators such as the repatriation of $2.3 billion in profit by multinational companies and the resolution of issues like blocked profit repatriation and letters of credit. Aurangzeb highlighted the importance of banks in reviving ailing industrial units and participating in the privatisation process, adding that their role is vital in economic stability.
Key Takeaways:
- The State Bank of Pakistan (SBP) has held the key policy rate steady at 11%, citing inflationary risks and external uncertainties.
- The central bank had lowered the interest rate by 100 basis points (bps) to 11% on May 5 and cut the rate by 1,100 basis points since June from an all-time high of 22%.
- Finance Minister Muhammad Aurangzeb stated that the economy is on a path to stability due to the removal of structural barriers.
- Multinational companies repatriated $2.3 billion in profit in the fiscal year ending June 30.
- Aurangzeb stressed that banks must play a role in reviving ailing industrial units and should be active participants in the privatisation process.
- The Federal Board of Revenue's (FBR) new enforcement powers are linked to sales tax, not income tax.
- The government has simplified the tax return filing process for salaried individuals and small businesses.
Statistics:
- $2.3 billion in profit repatriated by multinational companies in the fiscal year ending June 30.
- 1,100 basis points cut in the interest rate since June from an all-time high of 22%.
- 11% key policy rate held at the State Bank of Pakistan (SBP).
- 100 basis points cut in the interest rate to 11% on May 5.
- 22% all-time high interest rate cut by 1,100 basis points since June.
Sources:
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Pakistan Today (2023)
Pakistan Today Editorial Team