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Business Recorder
16-07-2025
- Business
- Business Recorder
Moody's briefed about reforms, outlook
ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb held a virtual engagement with Moody's Rating Agency (Moody's) on Tuesday to provide an in-depth briefing on Pakistan's macroeconomic outlook, reform agenda, and financial stability. An official statement issued by the Finance Division stated that Minister for Finance and Revenue, accompanied by Minister of State for Finance Bilal Azhar Kayani, governor State Bank of Pakistan, and senior officials from the Finance Division, Revenue Division, and other relevant ministries, briefed Moody's on the country's stabilising economy, reform drive, and global market re-engagement. The finance minister apprised the Moody's team of the significant strides Pakistan has made in stabilising its economy and laying the foundations for sustainable and inclusive growth. He underlined the successful completion of the final IMF review under the Stand-By Arrangement, including the disbursement of the second tranche and progress under the Resilience and Sustainability Facility (RSF), as key milestones that have restored confidence in Pakistan's economic management, the official statement noted. The minister highlighted a series of structural reforms undertaken by the government to anchor long-term stability. These included prudent fiscal measures in the recently announced budget, tariff and trade liberalisation geared towards export-led growth, and concerted efforts to rationalise expenditure. The ongoing discussions with the United States on preferential tariff access were also noted as making encouraging headway. The meeting further outlined Pakistan's re-engagement with global financial markets, including the successful arrangement of $1 billion in commercial financing from the Middle Eastern region, plans for an inaugural Panda bond, and Pakistan's intent to explore the Eurobond and other international debt markets as credit ratings improve. Aurangzeb and his team presented compelling evidence of macroeconomic recovery, including a sharp reduction in inflation, a cut in the policy rate, stabilisation of the exchange rate, a current account surplus, and a surge in foreign exchange reserves—crossing $14 billion by the end of June. Improvements in remittance inflows and export performance were also cited as signs of resilience and renewed investor confidence. The Moody's team was provided a comprehensive overview of Pakistan's reform journey, with a particular emphasis on improving the tax-to-GDP ratio through technology-driven tax administration reforms, digitisation of systems, and robust enforcement measures. The minister emphasised that under the direct oversight of the prime minister—who chairs regular meetings on tax reform—the government was implementing measures to expand the tax base, plug leakages, and enhance compliance. He noted that the Rs2 trillion revenue delta achieved this year had come through autonomous efforts, and the government was firmly committed to reaching a tax-to-GDP target of 13 to 13.5 percent in the next few years. The finance minister also addressed queries from the Moody's team and reiterated Pakistan's commitment to staying the course on macroeconomic reforms, including in areas of privatisation, restructuring of state-owned enterprises (SOEs), and right-sizing of government. Aurangzeb expressed optimism that the improving macroeconomic indicators and reform momentum would be positively acknowledged by rating agencies, further strengthening Pakistan's case to tap international markets and deepen its external sector stability. Pakistan, he affirmed, is ready to carry forward this journey of resilience, reform, and recovery to unlock long-term, inclusive, and export-oriented economic growth. Copyright Business Recorder, 2025
Express Tribune
15-07-2025
- Business
- Express Tribune
Aurangzeb briefs Moody's on Pakistan's reform push, stable outlook
Finance Minister Muhammad Aurangzeb speaks during a meeting with Moody's delegation in Islamabad on Tuesday. Photo: APP Listen to article Pakistan is re-entering global financial markets amid signs of macroeconomic stabilisation, with plans for its first Panda bond and ongoing talks for preferential tariff access with the United States to support an export-led growth strategy, Finance Minister Muhammad Aurangzeb said on Tuesday. In a virtual briefing with Moody's Investors Service, the finance minister outlined the country's macroeconomic turnaround, reform agenda, and external sector stabilisation efforts. Aurangzeb was accompanied by Minister of State for Finance Bilal Azhar Kayani and State Bank Governor Jameel Ahmad. The engagement, held at the Finance Division, was part of Islamabad's broader outreach strategy to regain investor confidence and improve its sovereign credit profile. According to an official statement, Aurangzeb highlighted Pakistan's recent macroeconomic gains, including a sharp drop in inflation, monetary easing through a reduction in the policy rate, exchange rate stabilization, and a current account surplus. He noted that foreign exchange reserves had crossed $14 billion by the end of June, aided by improved remittance flows and stronger export performance. The minister informed Moody's that Pakistan had successfully completed the final review under the IMF's $3 billion Stand-By Arrangement (SBA), which included the release of the final tranche. He also underscored progress under the Resilience and Sustainability Facility (RSF), terming both milestones as critical for restoring market credibility. 'The reform trajectory is firmly in place,' Aurangzeb said, pointing to recent budgetary measures aimed at fiscal consolidation, including expenditure rationalisation and a broadened revenue base. He reiterated that Pakistan is targeting a tax-to-GDP ratio of 13 to 13.5 per cent over the medium term. The Rs2 trillion revenue gain achieved this fiscal year, the minister noted, had come from autonomous administrative efforts, not through new tax measures alone. He stressed that tax reform remains a top priority under the direct oversight of the prime minister, with a focus on technology-driven enforcement, digitisation of tax systems, and plugging leakages. The team also apprised Moody's of ongoing discussions with the US regarding preferential tariff access for Pakistani exports, which Aurangzeb said were 'making encouraging headway.' The meeting served as a platform to showcase Pakistan's re-engagement with global capital markets. The finance minister revealed that $1 billion in commercial financing had already been secured from financial institutions in the Middle East. Additionally, Pakistan is actively working on launching its inaugural Panda bond — a renminbi-denominated bond to be issued in the Chinese market — and is exploring other international debt instruments, including a potential return to the Eurobond market, contingent on rating upgrades. He added that Pakistan remains committed to key structural reforms, including the privatisation and restructuring of state-owned enterprises (SOEs), as well as right-sizing of the federal government. Responding to queries, the minister reiterated that Pakistan is not looking for short-term fixes but is focused on building long-term, inclusive, and export-led growth, while expressing optimism that the reform momentum and macroeconomic stabilization would be reflected positively in future sovereign credit assessments. 'Pakistan is ready to carry forward this journey of resilience, reform, and recovery,' the finance minister concluded, signalling that the country was once again positioning itself as a credible investment destination.
Business Recorder
15-07-2025
- Business
- Business Recorder
Govt presents ‘compelling evidence' of Pakistan's economic recovery to Moody's
Finance Minister Muhammad Aurangzeb, in a key engagement on Tuesday, presented Moody's Ratings, a global credit rating agency, with 'compelling evidence' of Pakistan's economic recovery and reform momentum. Accompanied by Minister of State for Finance Bilal Azhar Kayani, the Governor of the State Bank of Pakistan (SBP) Jameel Ahmed, and senior officials from key ministries, Aurangzeb highlighted the country's progress in stabilizing the economy—including a sharp reduction in inflation, a cut in the policy rate, stabilization of the exchange rate, a current account surplus, and a surge in foreign exchange reserves—crossing $14 billion by the end of June. Improvements in remittance inflows and export performance were also cited as signs of resilience and renewed investor confidence, read a statement released by the Finance Division. During the in-depth session, the finance minister apprised the Moody's team of the significant strides Pakistan has made in stabilising its economy and laying the foundations for sustainable and inclusive growth. Moody's upgrades Pakistan's banking outlook to positive He underlined the successful completion of the final IMF review under the Stand-By Arrangement, including the disbursement of the second tranche and progress under the Resilience and Sustainability Facility (RSF), as key milestones that have restored confidence in Pakistan's economic management. Aurangzeb highlighted a series of structural reforms undertaken by the government to anchor long-term stability. These included fiscal measures in the recently announced budget, tariff and trade liberalisation geared towards export-led growth, and concerted efforts to rationalise expenditure. The ongoing discussions with the United States on preferential tariff access were also noted as making encouraging headway. The meeting further outlined Pakistan's re-engagement with global financial markets, including the successful arrangement of $1 billion in commercial financing from the Middle Eastern region, plans for an inaugural Panda bond, and Pakistan's intent to explore the Eurobond and other international debt markets as credit ratings improve. Govt to meet business community tomorrow, ahead of planned strike, says Aurangzeb As per the statement, the Moody's team was provided a comprehensive overview of Pakistan's reform journey, with a particular emphasis on improving the tax-to-GDP ratio through technology-driven tax administration reforms, digitisation of systems, and robust enforcement measures. Aurangzeb emphasised that the government was implementing measures to expand the tax base, plug leakages, and enhance compliance. He noted that the Rs2 trillion revenue delta achieved this year had come through autonomous efforts, and the government was firmly committed to reaching a tax-to-GDP target of 13 to 13.5% in the next few years. The finance minister also addressed queries from the Moody's team and reiterated Pakistan's commitment to staying the course on macroeconomic reforms, including in areas of privatisation, restructuring of state-owned enterprises (SOEs), and right-sizing of government. Aurangzeb expressed optimism that the improving macroeconomic indicators and reform momentum would be positively acknowledged by rating agencies, further strengthening Pakistan's case to tap international markets and deepen its external sector stability.
News18
10-05-2025
- Business
- News18
Billions In The Bank, Missiles In The Sky: How IMF Bailout Changed Pakistan's War Posturing
Last Updated: A senior IAS officer said whenever Pakistan secures international funding, particularly from Western-backed institutions like IMF, it translates aid into geopolitical defiance Hours after the International Monetary Fund (IMF) approved the release of $1.1 billion to Pakistan under a Stand-By Arrangement (SBA) and request for another arrangement under the Resilience and Sustainability Facility (RSF), with access of about US$1.4 billion (SDR 1 billion), missiles and drone lit up the sky violating India's airspace in the wee hours. The ink on the IMF approval wasn't even dry when Islamabad flexed its muscle and dramatically changed the posturing. 'This timing is no coincidence. It has always been a part of a well-worn playbook. When Pakistan secures international funding, particularly from Western-backed institutions like the IMF, any regime in Pakistan often translates that financial relief into geopolitical defiance. Economic crisis may bring Islamabad to the negotiating table for some time, but cash in hand quickly revives the military's confidence—and its appetite for further and escalated confrontation," said a senior IAS officer serving in a related ministry. 'Our senior diplomats, including ambassadors and high commissioners in the US and UK, in their public statements and through interviews to international media channels, showed proof of Pakistan's complicity and support to terrorist organisations. They have also shown glaring evidence, including photos of Pakistan Army officials, in uniform, standing behind a globally recognised terrorist," added the official. As Pakistan shot drones and missiles towards India, Jammu and Kashmir Chief Minister Omar Abdullah, in a sharp reaction, said: 'I am not sure how the 'International Community' thinks the current tension in the subcontinent will be de-escalated when the IMF essentially reimburses Pakistan for all the ordnance it is using to devastate Poonch, Rajouri, Uri, Tangdhar and so many other places." Proxy Power Or Fiscal Footing? 'The current fund insisted on tax reforms, slashing subsidies, and raising energy prices. Pakistan complied—on paper," a source in the Union government said. But while civilian institutions struggle to meet IMF targets, the military remains untouched. Defence spending is likely to go up by almost 18 per cent, as reported by the Pakistan government's budget approval documents, while health, education, and social welfare lag behind. The signal has been clear. Geo-political and strategic dominance took priority over structural reform. India's Concern: Non-State Levellers Meanwhile, India has already raised concerns at several global forums and even during the board meeting that IMF funds may inadvertently bankroll destabilising activities. This is, however, not unfounded anxiety. 'From cross-border ceasefire violations to supporting proxy actors, Pakistan's behaviour has often sharpened in periods following financial bailouts," said the source who has served on the Pakistan desk for years and analysed the country's trajectory of receiving 25 bailout packages from the global forums. Pakistani Prime Minister Shehbaz Sharif, immediately after the package was announced, claimed that 'hostile efforts to derail the IMF program have failed". But what has actually succeeded is a familiar cycle: economic collapse, global sympathy, funding, and then regional provocation. This raises uncomfortable questions even for the IMF and its backers. Can financial aid be given without enabling geopolitical brinkmanship or at least certain riders? Should there be stricter oversight on how bailout money affects defence and foreign policy? Until such conditions are enforced, the world may continue to watch this dangerous paradox unfold—where missiles follow money, and bailouts buy not reform, but renewed defiance. First Published: May 10, 2025, 10:33 IST
Arab News
11-02-2025
- Business
- Arab News
Islamabad says IMF team in Pakistan for governance review, not judicial oversight
ISLAMABAD: An International Monetary Fund (IMF) team is currently visiting Pakistan to conduct a Governance and Corruption Diagnostic Assessment (GCDA), a finance ministry official said on Monday, adding the visit has nothing to do with the country's judicial system or a review of Pakistan's ongoing $7 billion IMF program. The statement came a day after the finance ministry said the three-member IMF mission would conduct the governance and corruption assessment to recommend reforms for transparency, institutional strengthening and sustainable growth in the South Asian country. Pakistan, currently bolstered by the $7 billion IMF facility that was granted in September, is navigating an economic recovery path. IMF bailouts are critical for Pakistan, which narrowly avoided a sovereign default in June 2023 by clinching a last-gasp, $3 billion IMF loan. The global lender is set to review Pakistan's progress on the current $7 billion program by March, with the government and central bank expressing confidence about meeting the targets. 'All rumors suggesting that the IMF team is here to evaluate the judicial process or other related matters are baseless and nothing of that sort is happening during this visit,' Khurram Shehzad, an adviser to Finance Minister Muhammad Aurangzeb, told Arab News. 'The purpose of the IMF team's visit is to assess the governance structure, which falls under the global lender's mandate for countries under its program.' Arab News approached the IMF mission currently visiting Pakistan but did not get a reply by the filing of this story. Shehzad refuted reports suggesting that the IMF team would meet members of the Judicial Commission of Pakistan next week to discuss the process of judges' appointment. The reports emerged amid calls from lawyer bodies and opposition to repeal the 26th constitutional amendment, which empowered parliament to pick the country's top judge and introduced fundamental changes in the appointment of judges in the superior judiciary. Shehzad said the IMF team's visit was not sudden, it was rather planned in July 2024 as part of Pakistan's previous $3 billion Stand-By Arrangement (SBA). 'This visit is unrelated to the six-month review of the current IMF program, which will be conducted by a separate team,' he said. 'That team has not yet arrived in Pakistan and is expected [to arrive] by the end of February or the first week of March.' He said this was not a new development neither exclusive to Pakistan as similar assessments had been conducted in many other countries. 'They are in Pakistan to conduct a Governance and Corruption Diagnostic Assessment (GCDA), focusing on evaluating corruption vulnerabilities across six core state functions, including fiscal governance, central bank governance and operations, financial sector oversight, market regulation, rule of law, and Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT),' the finance adviser said. The IMF has been offering guidance and technical support for a long time, which has contributed to improved governance by enhancing public sector transparency and accountability, according to the official. 'They followed a process in which they assess a country's governance structure by meeting regulators and institutions to explore ways to improve it in line with global best practices,' he shared. Following the analysis, Shehzad said, the IMF team will provide GCDAs with recommendations to systematically address the vulnerabilities. 'They will provide a comprehensive overview of the governance structure, highlighting areas for improvement and suggesting methods to bring that improvement and the report on the IMF team's assessment will be published by the government in July this year,' he added. The IMF mission will mainly engage with the Finance Division, Federal Board of Revenue, State Bank of Pakistan, Auditor General of Pakistan, Securities & Exchange Commission of Pakistan, Election Commission of Pakistan, and Ministry of Law & Justice, according to Pakistan's finance ministry. Traditionally, the IMF's main focus has been to encourage countries to correct macroeconomic imbalances, reduce inflation, and undertake key trade, exchange and other market reforms needed to improve efficiency and support sustained economic growth. 'While these remain its main focus in all its member countries, however, the IMF has found that a much broader range of institutional reforms is needed if countries are to establish and maintain private sector confidence and thereby lay the basis for sustained growth,' the ministry said in a statement, adding that the IMF identified that promoting good governance in all its aspects, including ensuring the rule of law, improving the efficiency and accountability of the public sector and tackling corruption, are essential elements of a framework within which economies can prosper. In 1997, the IMF adopted a policy on how to address economic governance, embodied in the Guidance Note 'The Role of the IMF in Governance Issues.' To further strengthen the implementation of this policy, the IMF adopted in 2018 a new Framework for Enhanced Engagement on Governance (Governance Policy) that aims to promote more systematic, effective, candid, and evenhanded engagement with member countries regarding governance vulnerabilities, including corruption, that are critical to macroeconomic performance, according to the finance ministry. Under this policy and framework, the IMF offers to undertake GCDA with member countries to analyze and recommend actions for addressing corruption vulnerabilities and strengthening integrity and governance in IMF member countries. Since 2018, 20 GCDA reports have been finalized, including those for Sri Lanka, Mauritania, Cameroon, Zambia, and Benin and ten diagnostics are ongoing, with several more under IMF consideration.
