Aurangzeb says remittances, which hit $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. FDI in productive sectors would not only increase GDP but also create employment opportunities and create shared economic benefits for Pakistan and its partners.
In an interview with CNN Business Arabia, the minister said that over the past 18 months, Pakistan has implemented a comprehensive economic stabilization program which has delivered positive and measurable results.
He said inflation, which had peaked at 38%, has now fallen to double digits. On the fiscal front, Pakistan has achieved primary surpluses while the current account deficit has 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 stronger external resilience.
Aurangzeb also referred to two major international endorsements of Pakistan’s improved 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 has recently approved the second review under the Extended Fund Facility (EFF) following its successful completion.
He said this development reflects growing international confidence in Pakistan’s economic policies and reform agenda.
The finance minister said economic stability has been achieved through disciplined fiscal and monetary policies along with comprehensive structural reforms. He added that reforms are underway in key areas, including taxation, energy, state-owned enterprises, public financial management and privatization, with the aim of strengthening stability and laying the foundations for sustainable economic growth.
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Talking about tax reforms, he said Pakistan’s tax-to-GDP ratio stood at 8.8% at the start of the reform program and rose to 10.3% in the last financial year, with a clear roadmap in place to raise it to 11%.
He said the government’s goal is to develop a tax system that ensures fiscal independence in the medium and long term. For this purpose, economically significant but under-taxed sectors such as real estate, agriculture and wholesale and retail trade are brought into the tax net.
Actions are also being taken to reduce tax evasion and leakages through production monitoring and artificial intelligence-based technologies, alongside tax administration reforms that include personnel, processes and technology.
On the energy sector, the finance minister said steps are being taken to improve governance in distribution companies, encourage private sector participation, promote privatization and reduce circular debt, a longstanding challenge for the sector.
He emphasized that tariff reforms are essential to make energy competitive for industry and to promote industrial activity.
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FinMin praised the long-standing support of GCC countries, including Saudi Arabia, the United Arab Emirates and Qatar, noting their assistance through financial support, investment and cooperation in international financial institutions such as the IMF. He said the relationship is now entering a new phase with a focus on expanding trade and investment flows.
He said remittances remain the backbone of Pakistan’s current account, which stood at about $38 billion last year and is expected to reach $41 billion. to $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 investment 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 have entered their final stages.
