Federal Finance Minister Muhammad Aurangzeb has said that a reduction in government spending is inevitable to support the armed forces in the internal situation on both borders.
Speaking at the Karachi Chamber of Commerce, he said that it has become clear that the government will have to reduce its spending, government spending and loans have been paid and financial discipline has been brought to some extent.
He said that our efforts are to reduce the government’s borrowing from banks, why loans given to the private sector are decreasing is a matter of concern.
The Finance Minister said that a reduction in government spending is inevitable to support the armed forces in the internal situation on both borders, the Governor State Bank will seek answers from commercial banks on the slow provision of public-private loans.
Muhammad Aurangzeb said that it is the job of the State Bank to discuss the policy rate, the Governor will hold a meeting with banks this week to increase private sector credit, the government’s own debt servicing cost is low, the government has reduced its debt and the duration of the debt.
He said that the government is not forced to take loans from banks, the interest on loans has been reduced, we want to help our armed forces by saving money.
He said that if multinational companies have left the country, more have come to the country than that, Google is also opening its office in Pakistan, there has definitely been a slight increase in inflation, but the overall inflation will remain at 7 to 7.5 percent per year, local companies are investing in minerals.
The Finance Minister said that the pharma industry in the country is growing rapidly, and pharma exports are also increasing.
‘Will use diplomatic relations to increase investment’
Earlier, while addressing the ‘Futuresumt’ in Karachi, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said that the reform agenda, fiscal discipline and strategic partnerships aim to redefine the country’s economic direction, equipping the youth with digital and technical skills is essential, rapid population growth and climate change are two major existential challenges for Pakistan, which require measures to address.
The Finance Minister said that during the last few weeks, he has held meetings in Washington and Riyadh, the global economic recovery process is underway and as a result, some economic indicators are also improving, in many countries of the world, infrastructure reforms are being implemented and as a result, the private sector is coming forward to play a leading role, there is a need to focus on productivity-based economic development and growth by making full use of the opportunities of artificial intelligence and technology-based innovation.
The Finance Minister said that political and geographical factors and tensions, protectionism, changes in the global order and supply chain disruptions are creating uncertainty. Emerging economies, including Pakistan, will have to exercise caution in this regard to cope with economic shocks.
The Finance Minister said that the country’s economy is stable, the improvement in Pakistan’s credit rating by key rating agencies and the staff-level agreement under the IMF program are reflecting external confidence in the country’s economy, policies and direction. It is important to use economic stability for sustainable economic growth. For this purpose, attracting domestic and international investors will be important. The corporate sector’s profits on the Pakistan Stock Exchange have increased by 14 percent in the first nine months of the calendar year.
The Finance Minister said that to stabilize Pakistan’s economy, restore investor confidence and set the path for sustainable growth, there is a need to adopt a far-sighted strategy based on reforms instead of reactive policymaking. The government is committed to advancing the reform agenda, fiscal discipline and strategic partnerships with the aim of redefining the country’s economic direction.
The Finance Minister said that pointing to the global consensus that limiting the role of governments and promoting productivity-based, private sector-led growth is the need of the hour.
He clarified that economic stability is not a destination in itself but a foundation for sustainable investment and long-term growth. According to the latest OICCI survey, 73% CEOs are calling Pakistan suitable for investment, which was 61% earlier. These figures are a sign of increasing investor confidence and improving the country’s direction.
Senator Aurangzeb said that the stability of the overall economy and geopolitical factors are giving Pakistan an opportunity to transform bilateral cooperation into trade and private investment.
He reiterated the government’s commitment to provide a conducive environment for the promotion of private investment in priority sectors such as minerals, IT, agriculture, pharmaceuticals, and blue economy. Regarding technology and knowledge-based economy, the Finance Minister welcomed Google’s decision to open an office in Pakistan and to make the country a regional technical and export hub.
He stressed that it is imperative to equip the youth with digital and technical skills so that they can take advantage of high-value opportunities in the areas of coding, blockchain, and artificial intelligence.
Talking about structural reforms, the Finance Minister said that Pakistan has now moved beyond the “design phase” and entered the “implementation phase”.
He has made significant contributions to the areas of taxation, energy, restructuring of government institutions, privatization, public financial management, improving the performance of government institutions, pension reform, and debt relief.