The finance minister said the prime minister’s clearly articulated strategic direction signaled renewed economic confidence and a forward momentum for reform
By S.M. Inam
ISLAMABAD: Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said Pakistan was no longer seeking aid-based support and was shifting decisively towards trade- and investment-led engagement to secure long-term economic sustainability and mutually beneficial partnerships, particularly with Gulf Cooperation Council (GCC) countries.
In an interview with Arab media outlet, Finance Minister said this strategic direction, clearly articulated by the prime minister, reflected renewed economic confidence and reform momentum. He noted that Pakistan had remained on a comprehensive macroeconomic stabilization program for 18 months, producing measurable results. Inflation, which had peaked at 38%, had now fallen to single-digit levels.
Aurangzeb said Pakistan had achieved primary fiscal surpluses, while the current account deficit remained within targeted limits. The exchange rate had stabilized, and foreign exchange reserves had improved to roughly 2.5 months of import cover, signaling stronger external buffers.
He highlighted two external validations of Pakistan’s improving economic outlook. All three major international credit rating agencies upgraded Pakistan’s ratings and outlook this year, and the country completed the second review under the IMF Extended Fund Facility, receiving Executive Board approval earlier in the week. These developments, he said, demonstrated growing international confidence in Pakistan’s economic management.
The minister said stabilization had been achieved through coordinated monetary and fiscal policies combined with an ambitious structural reform agenda. Reforms were being implemented across taxation, energy, state-owned enterprises (SOEs), public financial management and privatization to consolidate stability and support sustainable growth.
On taxation, he noted progress in raising the tax-to-GDP ratio from 8.8% at the start of the reform program to 10.3% last fiscal year, with a projected path towards 11%. The government aimed to achieve medium- to long-term fiscal sustainability by widening the tax base to include undertaxed but economically significant sectors such as real estate, agriculture, and wholesale and retail trade. Compliance measures were being strengthened through production monitoring systems and AI-enabled technologies, while tax administration reforms were under way in people, processes, and technology.
In the energy sector, he pointed to efforts to improve governance in distribution companies, involve private sector expertise, advance privatization, and reduce circular debt. Rationalizing the tariff regime, he said, was essential for strengthening industrial competitiveness and enabling economic recovery.
