ISLAMABAD: Pakistan must overhaul its economic foundation to break free from repeated International Monetary Fund (IMF) bailouts, according to Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, who stressed that the recently approved 37-month Extended Fund Facility (EFF) should be the country’s “last”, ARY News.
While addressing a press conference in Islamabad, Aurangzeb said, “We need to adopt a new approach. If we are saying that this is going to be the last programme of IMF, we have just embarked on, we have to change the DNA of the economy fundamentally”. This call for fundamental change comes as Pakistan faces significant economic challenges, including currency struggles, high inflation, and a substantial trade deficit, as per ARY News.
Pakistan has availed 25 IMF programmes since becoming a member of the IMF in 1950. The most recent programme is a 37-month EFF approved in September 2024. The new $7 billion loan is Pakistan’s 25th IMF programme since independence in 1947 — the highest number of any country, Voice of America reported.
According to ARY News, the IMF package is not just for the federal government but for the entire country, said Aurangzeb, in a press conference held in Islamabad. He stressed the importance of implementing tough decisions to ensure economic stability. In press conference, he was accompanied by the Chairman Federal Board of Revenue, Rashid Mahmood Langrial.
Further, Aurangzeb affirmed that there were two main reasons for going to IMF for EFF which include bringing permanence to macroeconomic stability and executing critical reforms under homegrown economic agenda. He also warned that failing to take these measures now would result in further burdening the salaried class and highlighted the need to control the growing population to achieve sustainable development.
Aurangzeb pointed out the ‘inevitability’ of increasing tax revenues but emphasised that tax collection authorities must respect human rights, adding that also mentioned the government’s plan to extensively use technology and announced the establishment of digital checkpoints to combat smuggling.
Reaffirming the government’s resolve to implement homegrown structural reforms, Aurangzeb emphasized the crucial need to bring fundamental changes in the DNA of the country’s economy, leading to an export-driven model, thereby fostering sustainable growth.
He said, that macroeconomic stability, creates a foundation and “if the foundation is not strong, we cannot construct a house. “If we have to go for inclusive and sustainable growth, it has to be on the background of the macroeconomic stability,” he remarked.
The minister said the macroeconomic stability has continued during the first quarter of the current fiscal year, however, it needed permanence to lead to sustainable growth. “Macroeconomic stability is not an end in itself, it is a means to an end”, he remarked. (ANI)