ISLAMABAD
Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb has said that Pakistan is no longer seeking aid-based support and is firmly transitioning towards trade- and investment-led engagement to ensure long-term economic sustainability and mutually beneficial partnerships, particularly with the Gulf Cooperation Council (GCC) countries.
In an interview with CNN Business Arabia, the Finance Minister underscored that this strategic shift, clearly articulated by the Prime Minister, reflects Pakistan’s renewed economic confidence and reform momentum.
The Finance Minister highlighted that over the past 18 months, Pakistan has remained on a comprehensive macroeconomic stabilization program, which has delivered tangible and measurable results. Inflation, which had peaked at an unprecedented 38 percent, has now declined to single-digit levels.
On the fiscal front, Pakistan has achieved primary surpluses, while the current account deficit remains well within targeted limits. He further noted that the exchange rate has stabilized and foreign exchange reserves have improved to approximately 2.5 months of import cover, reflecting strengthening external buffers.
Senator Aurangzeb pointed to two major external validations of Pakistan’s improving economic outlook. Firstly, all three international credit rating agencies have aligned their assessments this year by upgrading Pakistan’s ratings and outlook. Secondly, Pakistan has successfully completed the second review under the IMF Extended Fund Facility, with the IMF Executive Board granting its approval earlier this week.
These developments, he said, demonstrate growing international confidence in Pakistan’s economic management and reform trajectory. The Minister emphasized that macroeconomic stabilization has been achieved through a coordinated approach combining disciplined monetary and fiscal policies with an ambitious structural reform agenda.
Reforms are being implemented across key areas including taxation, energy, state-owned enterprises, public financial management, and privatization, aimed at consolidating stability and laying the foundation for sustainable growth.
On taxation, Senator Aurangzeb noted significant progress in improving Pakistan’s tax-to-GDP ratio, which stood at 8.8 percent at the start of the reform program. During the last fiscal year, it increased to 10.3 percent, with a clear path towards 11 percent. He explained that the government’s objective is to reach a level of tax collection that ensures fiscal sustainability over the medium to long term.
This is being pursued through widening the tax base by bringing previously undertaxed but economically significant sectors such as real estate, agriculture, and wholesale and retail trade into the formal net, alongside deepening compliance by reducing leakages through production monitoring systems and AI-enabled technologies. Simultaneously, the tax administration is being transformed through reforms in people, processes, and technology.
