FM Aurangzeb says "From day one, I was of the opinion that we should go into the IMF program."

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Transcript

00:00I think it's important to see that when the fiscal year of 2022-2023 came to an end,

00:13there was a contraction in the GDP by 0.2%.

00:21You are well aware of the level of inflation and I will talk about it later.

00:28In the same year, the depreciation of Pakistani rupee was about 29%.

00:36And our foreign exchange reserve went down to two weeks of import cover.

00:43That's where we started off from when this fiscal year 2023-2024 started.

00:53Obviously, there are different targets and we will talk about them.

00:58But that was the starting point.

01:04And the biggest thing in that, and that's why I say that this journey in fiscal year 2023-2024

01:15started under the leadership of Prime Minister Shabaz Sharif before the caretaker administration came in.

01:24And today we are sitting under the leadership of Prime Minister Shabaz Sharif

01:29under his elected administration for the next five years.

01:35At that time, I was in the private sector.

01:40As you know, I have been in this role for three and a half years.

01:49But even when I was there in the private sector, I was very loud and clear

01:56that we should go into the IMF program because there is no plan B.

02:02If there was a plan B, the IMF would not be called the lender of large resorts.

02:07The reason for that is when you call someone a lender of large resorts.

02:12So in that regard, I think the courageous step that was taken by the Prime Minister at the time

02:21to take us through the finishing line in terms of signing the nine-month stand-by agreement

02:28was a very, very important part of where we are today.

02:33Because if, God forbid, that hadn't happened, we wouldn't be sitting here discussing these targets.

02:41We would have been, as a country, in a very different situation.

02:45We would have had the same discussion but in a very different context.

02:51So that was a starting point to get the nine-month SBA going.

02:58Now let's fast-forward to where we are today.

03:03Because you have a very big role in financial journalism

03:14and you understand the economy very well and you follow it on a daily basis.

03:20So you have seen that in terms of GDP growth,

03:27the problems that came up on the LSM side,

03:33there is no rocket science as to why they came up.

03:38When the interest rate regime is where it is and the energy equation is where it is,

03:45it had to have an impact on the growth of large-scale manufacturing.

03:52But our saviour was agriculture or agriculture on the back of bumper crops.

03:59And as far as I am concerned, as we go forward,

04:04other than crops, dairy and livestock is going to remain a very, very big upside for us, God willing,

04:11in years to come and agriculture is going to remain a huge lever of growth as we go forward.

04:20So this is the story of the GDP side.

04:23After that, what happened on the fiscal side,

04:28I think as far as the revenue collection is concerned,

04:31all of you have been seeing this for years.

04:35You see the numbers of FBR on a monthly basis.

04:41And the close to 30% growth in the revenue that has been collected

04:48is almost unprecedented from where we started.

04:53And this is very important and I would like to talk a little more about this as we go forward.

05:01And because of this, the primary surplus that we have in the provinces,

05:06unless the provinces had delivered on their surpluses,

05:11we would not be able to deliver the surplus which we have committed to the fund under the 9-month SPA.

05:18So I just want to ensure that the provinces are given due credit for delivering on what they said they would deliver.

05:33Current account deficit.

05:37You know what the target was being said and what were the predictions.

05:49In fact, when this year started, the estimate at that time was that

05:55there would be a current account deficit of approximately $6 billion in this financial year.

06:03And again, you are very, very aware of where we are.

06:08The current account deficit forecasted for the year,

06:12because we have now come to June,

06:17I think our latest forecast is roughly about $200 million.

06:21That's the kind of delta which has come through.

06:25And in this, three months of this year, the current account went into surplus.

06:31And I don't have the final number for May at the moment.

06:35But if I just look at the 3.2 billion remittance number that has come during the month of May,

06:42I am pretty sure it will be another month where we will show a surplus.

06:48Which will then lead to what we thought when the government came in,

06:54that the current account deficit is going to be less than $1 billion,

06:57it has turned into reality.

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Transcript

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