Pakistan’s Economy Expected to Grow Over 4% This Year, Says Finance Minister

Federal Finance Minister Muhammad Aurangzeb has said Pakistan’s economy is expected to grow by more than 4% in the current fiscal year. He added that the government plans to privatise five to six state-owned entities, which could generate more than $1 billion.

In an interview with Reuters, Aurangzeb said around 12 state-owned entities are included in the government’s privatisation programme. The government also plans to privatise electricity distribution companies and outsource airports. Following the privatisation of Pakistan International Airlines (PIA), the government is focusing on selling other state-owned entities.

Aurangzeb said economic reforms are continuing under the International Monetary Fund’s (IMF) $7 billion loan programme. He added that the recent staff-level agreement with the IMF has opened the way for around $1.21 billion in additional financial support.

The finance minister said Pakistan and the United States are holding talks on a proposed $10 billion Exchange Stabilisation Fund. The proposed financial facility could help strengthen foreign exchange reserves and improve Pakistan’s access to international financial markets. He also said the country has sufficient fuel supplies and no shortage has been allowed to develop.

In an interview with Bloomberg TV, Aurangzeb said Pakistan’s debt strategy aims to improve access to international capital markets and reduce pressure from external debt repayments. He added that controlling inflation, maintaining foreign exchange reserves and keeping interest rates at appropriate levels are important for economic stability.

Aurangzeb said Pakistan privately issued $750 million worth of bonds in April this year and successfully accessed China’s Panda bond market through credit enhancement. He described the move as an important step, noting that China has one of the world’s largest and most developed bond markets.

The finance minister also said Pakistan issued $3 billion worth of Eurobonds around three weeks ago. Demand for the bonds was twice the amount offered. Investors from Asia, the Middle East, Europe and the United States participated in the sale.

He added that investors are showing interest in both rupee-denominated bonds and bonds issued in rupees but repayable in US dollars.