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 Pakistan’s future lies not in aid but in partnerships based on trade and investment. Foreign direct investment in productive sectors would not only increase GDP but also create employment opportunities and generate 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 yielded positive and measurable results.
He said inflation, which had peaked at 38%, has now fallen to single 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 around two and a half months of imports, indicating greater external resilience.
Aurangzeb also referred to two major international endorsements for Pakistan’s improving economic prospects, noting that all three global credit rating agencies have upgraded Pakistan’s rating and prospects this year. He added that the IMF Executive Board recently approved the second review under the Expanded Fund Facility (EFS) 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 has been achieved through disciplined fiscal and monetary policies, along with wide-ranging structural reforms. He added that reforms are being carried out in key areas, including taxes, 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% at the start of the reform program and increased to 10.3% in the last fiscal year, with a clear roadmap to raise it to 11%.
He said that the government’s objective is to develop a tax system that guarantees fiscal self-sufficiency in the medium and long term. To this end, economically important but undertaxed sectors, such as real estate, agriculture, and wholesale and retail trade, are being brought into the tax net.
Steps are also being taken to reduce tax evasion and leakages through production tracking and AI-based technologies, along with tax administration reforms covering personnel, processes and technology.
Regarding the energy sector, the Finance Minister said that measures are being taken to improve governance in 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 the industry and 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, and highlighted 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 focused on expanding trade and investment flows.
He said remittances remain the backbone of Pakistan’s current account: they amounted to around $38 billion last year and are expected to reach between $41 billion and $42 billion this year, with more than half coming from GCC countries.
The finance minister said Pakistan is actively collaborating 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 and said negotiations have entered their final stages.
