Advisor to Federal Minister, Mr. Khurram Schehzad, delivered an insightful presentation at a workshop titled “Economic & Debt Outlook 2025” as Chief Guest at an event organized by the Financial Markets Association of Pakistan.
The presentation included detailed overview of the measures taken by the Finance Ministry, particularly the Debt Management Office, to stabilize and strengthen the country’s finances and the economy. Underscoring the action plan of the Finance Ministry, Mr. Khurram Schehzad said that “we are making all the efforts to manage fiscal imbalances and optimize finances for long term sustainability”. He pointed out the adopted approach of enhanced revenue mobilization and expenditure rationalizationn under the structural reforms efforts to optimize public finances.
Discussing the key takeaways of the ministry’s strategy, the advisor informed that Pakistan has recently marked its first budget surplus in two and a half decades, primary surplus is almost double of the full year target, and a reduced Debt-GDP. He maintained that tax shortfall is also expected to be bridged by bringing the untaxed and under-taxed under the tax net, including through enhanced compliance and enforcement efforts.
“We are preferring long-term sustainability over short-term and short-lived quick relief measures”, Khurram Schehzad added. He lauded SBP on increasing the foreign exchange reserves by absorbing excess dollars liquidity from the local market. The advisor also mentioned the ongoing projects of Panda Bond and Green Bond whereas SBP will also launch an investment platform for both retailers and corporates to lend directly to the government, which will help the government diversify its debt while keeping the finding cost low.
He highlighted the significance of “rightsizing” to cut budget expenditure. “There are 43 Federal Ministries and more than 400 departments which needs to be reduced and optimized”, Khurram said. Education, Health, IT, Commerce, and many ministries will cut their way down, most of which are already devolved to the provinces so they should be abolished from federal government by which the government will be able to cutdown its running expenses costing Rs 870 billion to the exchequer. Another notable reform under is Pensions, where the bleeding has been stopped, by abolishing many overlaps.
The third key area has been SOEs where the commercial entities will either be shut or be put up for privatisation. Energy has been another aread whete the the relevant ministry has already initiated efforts to restructure IPPs contract for reducing fiscal burden, and more so for reducing cost of energy, paving the way for growth and investments.