Aurangzeb rules out consumption-led growth, says tariff reforms will continue

LAHORE: Finance Minister Muhammad Aurangzeb has ruled out pursuing liquidity-fuelled, consumption-led economic growth, saying Pakistan must prioritise sustainable, export-led expansion and continue with tariff reforms to improve the competitiveness of its industries. The finance minister was speaking at the Lahore University of Management Sciences (Lums) on Saturday at an event organised by the American Business Forum (ABF). ABF President Osman Khalid Waheed, former State Bank governor Raza Baqir and Habib Group Vice Chairman Salman Burni also spoke. Aurangzeb said Pakistan could not afford to repeat the cycle of import-dependent growth that had previously led to balance-of-payments problems and forced the country to seek support from lenders of last resort.

He said the government was committed to continuing tariff reforms , primarily to reduce the cost of raw materials and intermediate goods for exporters, despite concerns over the timing of the measures. “We are very clear: no matter how much pressure there is, we are not going to go for liquidity-fuelled, consumption-led growth,” he said, adding that Pakistan needed to avoid another cycle in which a temporary acceleration in economic activity was followed by a balance-of-payments crisis. Aurangzeb said the government had attempted to provide a direction towards export-led growth in the latest budget through measures including the elimination of super taxes, reductions in tax slabs and financing for exporters at 4. 5 per cent. On tariff reforms, he said the government had protected domestic industries for too long without sunset clauses and that the existing approach could not continue indefinitely. “We are in year two of the tariff reform, and we are going to continue with that; there is no turning back,” he said.…