Daily Times

Prime Minister Shehbaz Sharif has expressed satisfaction over the reduction in inflation rates and the recent upgrade in Pakistan’s credit rating by Moody’s, calling the predicted further drop in inflation in September a positive development.

In a statement released by the Prime Minister’s Office on Sunday, Sharif welcomed the decline in inflation indicators as reported by the Pakistan Bureau of Statistics.

“The Consumer Price Index saw a record drop in July 2024, bringing the inflation rate down to 11%. The economic experts’ forecast of further reduction in inflation by September is encouraging,” Sharif said.

He highlighted that following Fitch, the international rating agency Moody’s has also upgraded Pakistan’s credit rating, acknowledging the country’s positive economic indicators.

“Our government is committed to economic reforms. We are swiftly implementing the right-sizing policy, which I am personally overseeing. The positive effects on the economy will soon become evident,” the prime minister stated.

Sharif also mentioned the significant relief provided by the federal and Punjab governments to electricity consumers, along with the recent reduction in petroleum product prices.

“Our government is dedicated to ensuring that all benefits are passed on to the common man. The hard work of the government’s economic and financial team is steering the economy towards stability,” Sharif asserted.

He acknowledged the public’s hardships and assured that the government is working tirelessly to address the issues and alleviate the difficulties faced by the people.

Separately, the Federal Board of Revenue (FBR) has collected gross revenues of Rs.1,588 billion during the first two months of the current fiscal year 2024-25.

Against a target of Rs. 1,554 billion, the Board has collected Rs.1,456 billion in net revenue and refunds of Rs. 132 billion (44 percent more than last year) were issued to the exporters to resolve their liquidity problems, said a news release here on Sunday.

The FBR collected Rs. 593 billion under the head of domestic income tax as compared to Rs. 437 billion in July-August 2023, thereby showing a growth of 36 percent.

A healthy year-on-year growth of 40 percent was achieved in the domestic sales tax with collection of almost Rs314 billion.

Around Rs.86 billion were collected as Federal Excise Duty (FED) showing a year-on-year increase of 13 percent.

As a result a cumulative growth of almost 35 percent has been achieved in the collection of domestic taxes.

However, on the import side the same momentum could not be maintained due to continued compression in imports.

In US dollar terms, imports in the country have declined by 2.2 percent in August 2024 as compared to August 2023.

Similarly, the imports during August 2024 in PKR value also showed a decline of 7 percent as compared to August last year.

Moreover, the import of high duty items such as vehicles, home appliances, as well as miscellaneous consumer goods such as garments, fabrics, footwear etc have reduced significantly, changing the import mix.

This trend has impacted collection of Customs duties as well as other taxes collected at import stage.

Despite a modest increase of 4 percent in collection of Customs duties, FBR’s overall growth in net collection registered a 21 percent increase on collection of previous year.

FBR is likely to achieve the revenue targets of the first quarter as both the economic activity and imports are expected to show a healthy turnaround in the month of September due to lower policy rate and other interventions being made by the government in recent months.

The growth is also likely to show a significant increase as a result of digitisation and other FBR’s reforms which are currently being very keenly supervised by the Prime Minister and the Finance Minister.

These reforms include end to end monitoring of supply chains, automated production monitoring, POS, AI based data integration, import scanning and strict integrity management of FBR workforce.