Economy is improving and confidence is rising. SBP interest rates should drop by at least 4pc. New IMF package is on its way.

(March-15-2024)

Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain said on Friday that the country’s economic conditions are improving.

The improved situation infuses confidence in the local and foreign investors, while the central bank is also considering some reduction in the interest rate.

Mian Zahid Hussain said the business community wants the Central Bank to slash interest rates by at least four percent. 

Talking to the business community, the veteran business leader said that during the current year, the overall economic conditions are better than last year.

However, it is the new government’s responsibility to improve further the conditions, and they will continue to receive the unconditional support of the business community. 

The business leader said there is yet to be an immediate solution to Pakistan’s economic problems. A long battle will have to be fought for this, which will be a test of the new government and the finance minister, and success will be the only option. 

Mian Zahid Hussain said promoting investment is needed instead of relying more on loans. He said there is an urgent need to reduce the burden of taxes on the public and the industrial sector and that the tax base needs to be increased. 

He said that to increase the tax revenue, it has become necessary to levy tax on wholesale, retail, property, and agricultural income. At the same time, the FBR’s system should be modernized to increase its effectiveness and transparency. 

Mian Zahid Hussain said that the salaries are currently being paid by taking loans, and this situation can only continue for a short time, so there is a need to reduce the expenses. 

Transparency in the salary and pension system, elimination of ghost employees, sale of loss-making public companies, and elimination of losses in the electricity and gas sector have become necessary. 

He said the government had completed all the targets for receiving the IMF’s last tranche of the current standby program. The review negotiations are ongoing, which will have a positive result in case of a success.

Pakistan will receive 1.1 billion dollars from the IMF, which will pave the way for a new long-term package. The IMF has asked for a solid plan to eliminate power losses, privatize failed government institutions, increase the tax base, and innovate the FBR. 

If Pakistan agrees to correct the problems, all long-standing economic issues will be solved, and the economy will be revived.  

Mian Zahid Hussain further said that PTI should return to the national mainstream and play a positive role, including supporting the IMF program and GSP Plus.