Caretaker Federal Minister for Finance, Revenue, and Economic Affairs, Dr Shamshad Akhtar, addressed a press conference on Saturday, presenting a comprehensive overview of the interim government's 6-month economic performance. She emphasized the stabilizing impact of proactive measures taken during this period.
Dr Shamshad acknowledged the formidable challenge inherited concerning the exchange rate, with the USD-PKR parity reaching over 320, causing economic shockwaves. To counteract this, a joint action was initiated, leading to a significant reduction in the exchange rate to 279.48 in the interbank market. The minister highlighted the success in narrowing the spread between open and official rates, resulting in economic stabilization, restored confidence, and reduced business costs.
The trade deficit was reported to have decreased to $1.9 billion in January 2024, down from $2.6 billion in the same period the previous year. Additionally, exports experienced a notable 27% growth, reaching $2.8 billion in January.
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Dr Shamshad emphasized that widespread economic reforms have been implemented to enhance the country's export potential and market.
The successful delivery of the International Monetary Fund (IMF) Stand-By Arrangement (SBA) was hailed as a major achievement, securing a $700 million tranche in January 2024. Dr Shamshad acknowledged the delay in the IMF tranche and highlighted the government's proactive approach in securing assistance from the World Bank, ADB, and AIIB, resulting in unprecedented disbursements of $1.5-1.6 billion by December.
Despite a rise in markup expenditure, the caretaker finance minister stated that the fiscal deficit was successfully curtailed at 1.3% of the GDP from July to November 2024. Dr Shamshad acknowledged the impact of high-interest rates on the government's domestic debt but assured limited incremental growth in real debt.
On the external front, Pakistan's current account deficit during July-December FY2024 decreased by 71.1% to $831 million, attributed to a 35.2% decline in the trade deficit. Dr Shamshad introduced the newly launched Export-Import Bank (EXIM Bank), responsible for export finance operations.
Citing her professional experience, Dr Shamshad advocated for privatization to ensure efficient resource allocation and reduce subsidies. She emphasized the need for high-quality corporate governance in State-Owned Enterprises (SOEs) and encouraged investors to raise liquidity from the Pakistan Stock Exchange (PSX) to alleviate demand pressure on banks.
In conclusion, Dr Shamshad reiterated the interim government's commitment to economic stability, ongoing reforms, and fiscal responsibility, emphasizing a trajectory toward sustainable progress for the country.