Pakistan’s Economy Projected to Grow Above 4% Despite High Global Oil Prices; Over $1 Billion Expected Through State Privatization, States Finance Minister Muhammad Aurangzeb
ISLAMABAD : Muhammad Aurangzeb, the Minister for Finance and Revenue announced that Pakistan’s gross domestic product (GDP) will reach 4% or higher for the current fiscal year, thanks to consistent economic reforms, buoyant performance of the international bonds and the privatization programme.
During comprehensive interviews with Reuters and Bloomberg TV, Aurangzeb has announced that the government has been planning to sell 5-6 state-owned enterprises in the coming days and will have around 12 such companies in the pipeline to be sold, adding that major airports are also in the process of being outsourced and electricity distribution companies are also being considered for privatisation after the successful divestment of Pakistan International Airlines (PIA).
Here is a list of key points highlighted in the interviews given by the finance minister Muhammad Aurangzeb.
IMF Program and Financial Support: Structural economic reforms under the International Monetary Fund’s (IMF) $7 billion loan program are progressing smoothly, and a recent agreement with the IMF staff has paved the way for new financial assistance of around $1.21 billion, Aurangzeb said.
US Exchange Stabilisation Fund and Reserves: The finance minister said talks were under way with the United States for a proposed $10 billion exchange stabilisation fund which will further bolster foreign exchange reserves and improve access for Sri Lanka’s financial markets to international money. There is enough fuel available throughout the country and no fuel shortages should occur, he said.
International Bond Success: Aurangzeb highlighted that in April, Pakistan was able to successfully sell $750 million private placement bonds and access China’s large Panda bond market by credit enhancement. Moreover, Pakistan recently sold $3 billion in Eurobonds and received double the amount of them that had been called for by investors in Asia, Middle East, Europe and the U.S.
The minister also highlighted that maintaining the optimal level of inflation, foreign exchange reserves and interest rate policies are still essential for sustained stability and that the overall debt strategy would increase access to international capital markets and decrease external debt servicing pressure.