Islamabad, Mian Zahid Hussain, a leading figure in Pakistan's business community, has expressed optimism about the country's economic conditions, advocating for a significant reduction in the central bank's interest rates to further fuel the positive momentum. Hussain, who holds positions as Chairman of the National Business Group Pakistan, President of the Pakistan Businessmen and Intellectuals Forum, and leader of the All Karachi Industrial Alliance, in addition to his role as a former provincial minister, conveyed this perspective during discussions with the business sector on Friday.
According to Pakistan Businessmen and Intellectuals Forum, Hussain highlighted the improved economic climate, noting the increased confidence among local and foreign investors and suggesting that the State Bank of Pakistan (SBP) considers reducing interest rates by at least four percent. This call to action comes amid signs of economic recovery and the anticipation of a new International Monetary Fund (IMF) package designed to bolster the nation's finances.
During his engagement with the business community, Hussain reflected on the year's economic advancements compared to the previous period, underscoring the critical role of the new government in sustaining and enhancing these positive trends with the unwavering support of the business sector. However, he cautioned that immediate solutions to Pakistan's economic challenges are still distant, emphasizing the need for a long-term strategy to overcome these hurdles.
Hussain argued for a shift in focus from loan dependency to promoting investments, advocating for tax relief for the public and industrial sectors while calling for an expansion of the tax base. He outlined specific measures, such as taxing wholesale, retail, property, and agricultural income, alongside modernizing the Federal Board of Revenue (FBR) to enhance efficiency and transparency.
Addressing fiscal management, Hussain pointed out the unsustainable practice of financing salaries through loans, stressing the necessity of expenditure reduction, increasing transparency in the salary and pension system, and addressing losses in public companies and the energy sector.
Furthermore, he noted that Pakistan had met all the prerequisites for the last tranile of the current IMF standby program, with ongoing negotiations expected to result in a positive outcome. The successful review could unlock a $1.1 billion disbursement from the IMF, setting the stage for a long-term support package contingent upon Pakistan's commitment to reforming its economic structure, including measures to reduce power losses, privatize failing state enterprises, widen the tax base, and reform the FBR.
Hussain concluded with a call to the Pakistan Tehreek-e-Insaf (PTI) party to rejoin the national mainstream and support crucial economic initiatives, including the IMF program and the Generalized System of Preferences (GSP) Plus scheme, which could play pivotal roles in stabilizing and advancing Pakistan's economy.
The post Pakistan’s Economic Outlook Improves, Calls for Interest Rate Cuts Amid New IMF Negotiations appeared first on Pakistan Business News.