KARACHI: Mian Zahid Hussain, a prominent figure in Pakistan's business community, has welcomed the International Monetary Fund's (IMF) approval of a $1.2 billion tranche under the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF). He emphasized its significance for stabilizing the national economy.

Addressing the business community, Hussain highlighted that the infusion of funds would bolster the State Bank of Pakistan's foreign exchange reserves, signaling confidence to international creditors and investors. However, he cautioned that borrowing should not be viewed as a permanent solution.

The stability of the Rupee against the US Dollar, aided by this financial support, is expected to help manage costs of imported raw materials for the industrial sector. Despite improvements in macroeconomic indicators and inflation, high energy tariffs continue to challenge the industrial sector's global competitiveness.

Hussain underscored the need for the government to use the IMF's fiscal space to renegotiate agreements with Independent Power Producers (IPPs) and address circular debt. He advocated for expanding the tax base to include retail and real estate sectors, shifting away from reliance on indirect taxes.

Highlighting the funds from the RSF, Hussain urged their use for climate adaptation and green energy projects, crucial for Pakistan's agricultural and industrial future. He called for the IMF program to be a transition period to address structural issues, urging privatization of loss-making State-Owned Enterprises to reduce the fiscal deficit.

Hussain concluded by stressing the importance of ensuring that fiscal adjustments do not overly burden the general population or the business sector.