Editor-DN
what a story
Pakistan The administration has taken a number of steps to cut costs, all part of a $7 billion bailout deal. International Monetary Fund (IMF).
This includes cutting about 150,000 government jobs and closing down six ministries. Apart from this, two more ministries will be merged.
The IMF released the first tranche of more than $1 billion on September 26, shortly after Pakistan pledged to reduce its spending and raise its tax-to-GDP ratio.
Finance Minister Muhammad Aurangzeb outlined the economic reform strategy.
Finance Minister Mohammad Aurangzeb, who recently returned from the US, said that this would be Pakistan’s last program with the IMF.
He stressed that “right-sizing” was being done within the ministries and the decision to close six ministries and merge two others was to be implemented.
“Also, 150,000 posts in various ministries will be eliminated,” he added.
Pakistan is witnessing an increase in new taxpayers.
Aurangzeb noted a big jump in tax revenue, thanks to about 300,000 new taxpayers who jumped on board last year and an additional 732,000 this year.
This has increased the total number of taxpayers in the essentially cash-strapped country from 1.6 million to 3.2 million.
He also announced that non-filers would no longer be allowed to buy property or vehicles, a step towards regularizing the economy and increasing tax compliance.
There are signs of improvement in Pakistan’s economy.
Aurangzeb claimed that Pakistan’s economy was heading in the right direction as the country’s foreign exchange reserves were booming.
Pointing to strong growth in national exports and IT exports, he said strong investor confidence in the economy was a major achievement.
Aurangzeb also said that after winning, the government had reduced the policy rate by 4.5 percent and was optimistic that the exchange rate and the policy rate would remain stable.
History of Pakistan’s Economic Challenges and IMF Loan
Pakistan is facing some serious economic constraints and is almost on the brink of default in 2023. But, a timely $3 billion loan from the IMF helped avert the crisis.
Now, Pakistan has managed to secure a long-term loan with the global lender, expressing hope and determination that it will be the last.
However, many are skeptical because the country has already received nearly two dozen loans from the IMF and no lasting economic solution has been found.
