Policy Rate to Fall to Single Digit in Next Fiscal Year: Finance Minister
ISLAMABAD: Finance Minister Muhammad Aurangzeb has revealed that the policy interest rate is likely to fall to a single-digit figure during the upcoming fiscal year 2025–26.
Business leaders, especially from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), have been urging for a major cut in interest rates. FPCCI President Atif Akram has proposed bringing the rate down to 7%.
Tax Cuts and Privatization Strategy
In a recent interview with ARY News, the finance minister shared key plans for the new financial year. He said the government has reduced several taxes in the upcoming budget, criticizing previous tax hikes.
He questioned the effectiveness of those increases by asking, “Which tax increase has ever brought real improvement?”
Aurangzeb also confirmed that the privatization of Pakistan International Airlines (PIA) and the Roosevelt Hotel in New York is expected in the coming year. Additionally, efforts to privatize three DISCOs (power distribution companies) will continue.
He pointed out that PIA’s public image has been improving, which could lead to more attractive offers from potential buyers.
Revenue Generation & Green Policy Discussion
Speaking during the ARY talk show “Khabar”, the finance minister highlighted the importance of expanding revenue streams. He said that while a carbon levy could support both environmental goals and revenue collection, there are no current plans to introduce a petroleum levy.
He emphasized the need for strong policy actions to improve revenue performance. According to him, better enforcement last year led to a noticeable increase in revenue collection.
Economic Survey Data Defended
When asked about the recent Economic Survey, Aurangzeb stood by its accuracy, stating that the data shared is both correct and credible.
He also raised concerns over delayed tariff reforms, saying that these important changes should have been implemented earlier to benefit the economy.
