Aurangzeb says remittances, which reached $38 billion last year, are expected to reach $41 billion this year
Finance Minister Muhammad Aurangzeb. PHOTO: REUTERS
Federal Finance Minister Muhammad Aurangzeb has said that Pakistan’s future lies not in aid but in partnerships based on trade and investment. Foreign direct investments in productive sectors would not only boost GDP but also create employment opportunities and generate shared economic benefits for Pakistan and its partners.
Speaking in an interview with CNN Business Arabia, the minister said that over the past 18 months, Pakistan had implemented a comprehensive economic stabilization program, which had yielded positive and measurable results.
He said inflation, which peaked at 38%, has now fallen to single digits. On the fiscal front, Pakistan achieved primary surpluses, while the current account deficit remained within the set targets.
He added that the exchange rate has stabilized and foreign exchange reserves have improved to a level equivalent to about two and a half months of imports, indicating greater external resilience.
Aurangzeb also spoke of two major international supports for Pakistan’s improving economic outlook, noting that all three global credit rating agencies have upgraded Pakistan’s rating and outlook this year. He added that the IMF Executive Board recently approved the second review of the Extended Fund Facility (EFF) following its successful completion.
He said these developments reflect growing international confidence in Pakistan’s economic policies and reform agenda.
The Finance Minister said economic stability was achieved through disciplined fiscal and monetary policies, alongside broad structural reforms. He added that reforms are underway in key areas, including taxation, energy, state-owned enterprises, public financial management and privatization, aimed at strengthening stability and laying the foundation for sustainable economic growth.
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Talking about tax reforms, he said Pakistan’s tax-to-GDP ratio stood at 8.8 per cent at the start of the reform program and increased to 10.3 per cent in the last fiscal year, with a clear roadmap in place to take it to 11 per cent.
He said the government’s objective is to develop a tax system that guarantees fiscal autonomy in the medium and long term. To this end, economically important but undertaxed sectors, such as real estate, agriculture, wholesale and retail trade, are now brought into the tax net.
Steps are also being taken to reduce tax evasion and leakage through production control and artificial intelligence-based technologies, as well as tax administration reforms covering personnel, processes and technology.
On the energy sector, the Finance Minister said steps were being taken to improve governance of distribution companies, encourage private sector participation, advance privatization and reduce circular debt, a long-standing challenge for the sector.
He stressed that tariff reforms are essential to make energy competitive for industry and promote industrial activity.
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FinMin praised the long-standing support of GCC countries, including Saudi Arabia, the UAE and Qatar, highlighting their assistance in the form of financial support, investment and cooperation within international financial institutions such as the IMF. He said relations are now entering a new phase focused on expanding trade and investment flows.
He said remittances remain the backbone of Pakistan’s current account, standing at around $38 billion last year and expected to reach $41-42 billion this year, with more than half coming from GCC countries.
The Finance Minister said Pakistan is actively engaging with GCC countries to attract investments in priority sectors including energy, oil and gas, minerals and mining, artificial intelligence, digital infrastructure, pharmaceuticals and agriculture. He also expressed optimism about a free trade agreement (FTA) with the GCC, saying negotiations had entered their final stages.
