Pakistan eyes sovereign rating boost amid economic gains

Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, expressed optimism that the positive trends in various economic indicators could lead to an upgrade in the country's sovereign rating to a single B category.

Speaking at the "Dialogue on the Economy" event organized by the Pakistan Business Council (PBC), the minister noted that inflation has decreased, and the State Bank of Pakistan (SBP) has further lowered the policy rate, which will result in reduced Kibor rates, benefiting the industry.

He highlighted that the country's foreign exchange reserves have reached a significant milestone of $13 billion, enough to cover three months of imports.

"This is a crucial milestone for our economy, and if everything goes well, it could lead to a sovereign rating upgrade to a single B category," he said, adding, "There are many other factors that rating agencies consider, but this is one of the critical ones. We are moving in the right direction with strong remittance flows, IT services exports, and export diversification."

The minister emphasized that the government is on the right track to strengthen remittance inflows and promote export-led growth. He noted that Foreign Direct Investment (FDI) is a vital part of the country's roadmap, and every FDI should have an element of exportable surplus to move towards an export-led economy.

Regarding the World Economic Forum (WEF) engagements, he said that there were many constructive discussions and engagements with bilateral partners, banks, the IMF, and others on various themes, including trade, tariffs, Artificial Intelligence, digitalization, and the new world order.

The minister added that the government has introduced a more inclusive and transparent budget planning process, starting in January instead of April. All government departments have been asked to present their budgets, and forums like the PBC and various chambers have been invited to provide input.

He reiterated the government's commitment to its medium-term program with the International Monetary Fund (IMF), a three-year plan outlining key economic objectives.