Finance Minister: Public Will Reap Benefits of Low Inflation, Not Middlemen
Finance Minister Muhammad Aurangzeb assured on Saturday that the government will not allow intermediaries to exploit the current economic turnaround, especially the significant drop in inflation. Addressing the Lahore Chamber of Commerce and Industry (LCCI), he emphasized that the benefits of falling prices must go directly to the people.
This statement comes as Pakistan’s headline inflation dropped to just 0.7% year-on-year in March 2025 — the lowest since December 1965 — as reported by the Pakistan Bureau of Statistics (PBS). The figures exceeded expectations set by both market analysts and the Ministry of Finance, which had projected inflation to be between 1% and 1.5%.
Sharp Drop Driven by Food and Energy Prices
The cooling inflation, measured by the Consumer Price Index (CPI), was largely fueled by reduced prices in key food categories like wheat, onions, potatoes, pulses, and a significant cut in electricity tariffs. Monthly inflation stood at 0.9%, compared to a 0.8% drop in February and a 1.7% surge in March 2024.
Aurangzeb highlighted that such products carry substantial weight in the inflation basket, making their price shifts particularly influential.
Despite these gains, he noted with concern the discrepancy in sugar and edible oil pricing, which remains high in local markets despite declining international trends. While attributing this to approved sugar exports — especially to Afghanistan — he reaffirmed that the government was monitoring the situation closely to prevent profiteering.
Tax Reforms and Privatisation Plans Underway
The finance minister also acknowledged the burden currently faced by the salaried class, who see direct tax deductions. He pledged to introduce relief measures for this group and laid out a broader strategy to increase the tax-to-GDP ratio to 13%, which would enable more widespread fiscal relief.
Aurangzeb confirmed that 24 state-owned enterprises are marked for privatisation, with the goal of minimizing human interference and enhancing systemic efficiency.
Strategic Sectors in Focus: IT and Minerals
He further identified Information Technology and mineral resources as future economic drivers. Aurangzeb cited nickel exports from Singapore, which alone contribute $22 billion, as an example of what copper and other Pakistani minerals could achieve if properly developed.
Growing international interest in these sectors, combined with government efforts to remove investment barriers, promises a new wave of economic opportunities.
Lower Interest Rates and Improved Investor Confidence
The finance minister noted that inflation control has also enabled the interest rate to drop from 22% to 12%, reducing borrowing costs for industries and improving the investment climate.
Additionally, recent reforms have addressed issues related to profit repatriation, helping restore foreign investor confidence.
“We are here to serve the people. I visit chambers not just to speak, but to listen and act,” said Aurangzeb. “If the average person doesn’t benefit from our policies, we’ve failed in our purpose.”
As Pakistan embarks on a new economic path, the government’s focus remains fixed on ensuring accountability, boosting industrial growth, and securing long-term economic stability by making inflation relief meaningful and sustainable for all.
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