WASHINGTON: Finance Minister Muhammad Aurangzeb has stated that Pakistan’s economy has the potential to grow from over $300 billion at present to $3 trillion by 2047.

The minister underscored the country’s desire to grow out of its current economic troubles and to establish itself as a robust economy at a roundtable this week on “Implementing for Faster Results and Greater Impact” organised by the World Bank.

A statement issued by his office on Friday said he conveyed his conviction to enhance the national economy while referring to a 2022 World Bank report dubbed “From Swimming in the Sand to High and Sustainable Growth”. The report laid out a clear roadmap for Pakistan to become a high middle-income country by 2047.

The minister emphasised the World Bank’s focus on climate change, digitalisation, and human development aligned with government priorities. He also appreciated the launching of a single platform to enhance the operational effectiveness of the bank.

Mr Aurangzeb, who represented Pakistan at the spring meetings of the World Bank group in Washington this week, has also urged Moody’s Investor Service to upgrade the country’s credit rating soon.

Urges Moody’s to upgrade the country’s credit rating soon

The government hopes that financial institutions will also take note of Pakistan’s reinforced economic fundamentals and commitment to reforms and will do a favourable reassessment of the Pakistani economy.

The minister expressed his optimism during a meeting with Moody’s representatives in Washington, held on the sidelines of the spring meetings. While the meetings concluded on Friday, the minister remains in Washington for bilateral discussions with US officials and other counterparts.

In its last assessment in February, the credit rating agency defended its decision to downgrade the ratings, citing concerns about Pakistan’s liquidity and external position. Characterising Pakistan’s situation as “increasingly fragile”, with heightened default risks, Moody’s assigned the country a Caa3 rating.

During his meetings with Moody’s representatives, the finance minister shared insights on economic indicators, telling them that recent reforms have had a stabilising impact on the national economy.

He also highlighted the government’s priorities, which include tax reforms, energy sector overhaul, and privatisation agenda, said a statement issued by his office.

The minister “expressed intent to access international capital markets, focusing on the Middle East and China” and addressed concerns on inflation, foreign exchange reserves, debt repayments, external account vulnerability, and domestic liquidity“, the statement added.

He told Moody’s that “he expects a credit rating upgrade soon, fostering confidence in Pakistan’s economic trajectory”.

Pakistan’s current $3 billion IMF arrangement concludes this month, and Islamabad is working to secure a new deal by May. It is seeking a longer and larger package, aiming for $6 billion to $8 billion over three years.

While specifics on loan size remain undisclosed, Pakistan plans to request additional financing under the Resilience and Sustainability Trust.

“We expect the IMF mission to be in Islamabad around the middle of May — and that is when some of these contours will start developing,” the minister told Reuters after meetings with senior IMF and US officials.

In his interview with Reuters, Mr Aurangzeb underlined positive trends in foreign exchange reserves and debt rollovers, projecting a robust fiscal outlook.

“The bulk of our bilateral debt — including our China debt — is being rolled over, so in that sense, I think we are in good shape and I don’t see a big issue during this fiscal year nor the next fiscal year,” he said. But the minister also acknowledged that Pakistan needs to repay roughly $25bn dollars every fiscal year.

Published in Dawn, April 20th, 2024