Muhammad Aurangzeb, the finance minister of Pakistan, has expressed optimism that the country can achieve close to 3.5 percent GDP growth during the ongoing fiscal year, despite the economic challenges posed by recent floods. Speaking during an interview on the CGTN America program ‘One on One,’ the finance minister said climate change remains an existential threat to Pakistan, but economic stability measures have provided a solid foundation for recovery.
Aurangzeb explained that last year the economy recorded 3 percent GDP growth, and the original projection for this fiscal year was slightly above 4 percent. However, the impact of the floods has lowered that estimate. Still, he remains confident that Pakistan can achieve around 3.5 percent growth. This statement reflects a cautiously optimistic outlook from the finance ministry amid a broader macroeconomic stabilization effort.
The finance minister highlighted that Pakistan has made tangible progress on the macroeconomic stability front. Inflation has dropped to single digits, the policy rate has been halved, and credit rating agencies including Fitch Ratings, S&P Global Ratings and Moody’s Corporation have upgraded Pakistan’s outlook this year, signaling renewed investor confidence after several years of uncertainty.
On engagement with the International Monetary Fund, Aurangzeb noted that the staff-level agreement concluded earlier this month will unlock $1.2 billion in funding upon approval. He emphasized that the IMF’s continued trust in Pakistan underscores progress on key structural reforms, particularly in taxation, energy, state-owned enterprise restructuring, privatization, and public finance.
He acknowledged that privatization had lagged in previous years but pointed to a recent breakthrough with the successful bidding of a small state-owned bank by a UAE investor. This deal, he said, would pave the way for further digitalization and capital investment. The finance minister also reiterated his confidence in completing the privatization of Pakistan International Airlines before the end of the year, a move expected to enhance operational efficiency and reduce fiscal burdens.
Aurangzeb highlighted that Pakistan has successfully returned to commercial markets, tapping Middle Eastern banks after more than two years. The government also plans to issue the inaugural Panda Bond by the end of the year, followed by a larger Eurobond or Sukuk issuance next year under its Global Medium-Term Note (GMTN) program. This strategy aims to diversify funding sources and strengthen foreign exchange reserves.
Discussing Pakistan-China economic relations, Aurangzeb described the partnership as “ironclad” and stressed that the second phase of China–Pakistan Economic Corridor (CPEC) focuses on monetizing infrastructure and enabling private sector collaborations. He shared that during the latest visit to Beijing, 24 joint venture agreements were signed between Chinese and Pakistani private companies, indicating a shift from MoUs to actionable investment partnerships.
Aurangzeb further elaborated on the focus areas for CPEC Phase II, including enhancing the existing $19 billion trade volume, modernizing the Free Trade Agreement framework, and boosting investment in strategic sectors such as mining, agriculture, artificial intelligence, IT, and pharmaceuticals. He highlighted vaccine manufacturing as a priority area, pointing to the gaps exposed during the COVID-19 crisis and the potential to build domestic production capacity in partnership with Chinese enterprises.
Despite the challenges brought on by floods and climate change, the minister’s remarks reflect a renewed sense of economic direction backed by stabilization efforts, credit rating upgrades, and strategic global partnerships. Pakistan’s roadmap for fiscal 2026 hinges on maintaining these gains, expanding investment flows, and sustaining growth momentum in a challenging global economic environment.
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