Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb has said sustained mobilisation of private capital through privatization and public private partnerships (PPPs) will be essential for Pakistan to move from economic stabilization towards durable, investment led growth. He made the remarks while delivering the keynote address at the “Mobilizing Private Capital: National Strategic Dialogue on PPPs and Privatisation,” organized by the Asian Development Bank (ADB) and broadcast live. The minister said the government’s immediate priority remains protecting the macroeconomic stability achieved through difficult policy measures and avoiding a return to the boom and bust cycles experienced in the past.
Senator Aurangzeb said the key economic challenge now is to convert stabilization into sustainable growth, with the private sector taking a leading role in that transition. In this context, he highlighted privatization and PPPs as important mechanisms for bringing additional private capital into the economy and supporting investment. He said the government is pursuing measures aimed at creating conditions in which private businesses can contribute more significantly to economic expansion, while the state focuses on maintaining macroeconomic stability and improving the overall investment environment.
Discussing Pakistan’s macroeconomic position, the finance minister said the country’s twin deficit had narrowed to 2.6% over the past two and a half years. He attributed the improvement on the fiscal side to stronger revenue collection and expenditure controls. Technology driven reforms at the Federal Board of Revenue (FBR) have contributed to higher revenue collection, while controls over civil government operations and debt servicing have also supported the fiscal improvement.
Senator Aurangzeb said FBR revenues have increased by 40% over the last two years, resulting in an improvement in the tax to gross domestic product ratio from 8.8% to 10.3%. However, he noted that further progress remains necessary and said the ratio needs to reach 11% to 12% in the short term. The government therefore continues to face the task of strengthening domestic revenue collection while maintaining expenditure discipline as it works to consolidate the gains made in the macroeconomic position.
On the external account, the minister highlighted strong remittance inflows and the growing contribution of information technology and information technology enabled services exports. He described the sector as a standout growth area, with exports reaching $4.6 billion, including $1.6 billion generated by freelancers last year. At the same time, he said overall exports have remained broadly flat at around $30 billion, indicating that further efforts are required to increase the country’s export base and strengthen external earnings.
The finance minister also pointed to three sovereign credit rating upgrades since April 2025, saying these developments have helped Pakistan return to international capital markets. For the current fiscal year, the government is targeting economic growth of above 4%. He said foreign exchange reserves stood at $18.4 billion as of June 30 and the government is targeting reserves of $21 billion by the end of the fiscal year. According to the minister, reaching that level would provide import cover of slightly more than three months.
Senator Aurangzeb also highlighted the government’s reliance on the banking system to meet its borrowing requirements, saying the approach is no longer sustainable. He stressed the need to deepen Pakistan’s debt capital markets and broaden the investor base by bringing insurers and other non bank financial institutions into the market. A wider investor base, he said, would help diversify sources of government financing and reduce excessive dependence on banks for meeting borrowing requirements.
The minister cited collaboration between the Ministry of Finance and JazzCash, along with an application recently launched by the State Bank of Pakistan (SBP), as examples of initiatives aimed at enabling direct retail participation in government securities. These initiatives allow individuals to participate in government securities with investments starting from as little as Rs5,000, creating an avenue for smaller investors to access the government securities market.
On debt management, Senator Aurangzeb said the government is progressing with plans for a rupee denominated, dollar settled bond. He added that the government is separately examining the tokenization of existing Eurobond debt, drawing on a model adopted by Hong Kong. These measures form part of efforts to diversify debt market instruments and explore additional approaches to managing government financing.
Senator Aurangzeb said the government is taking a whole of government approach in support of both its privatization program and public private partnership agenda. He maintained that mobilizing private capital through these channels will remain important as Pakistan seeks to move beyond stabilization and towards sustained investment and economic growth. The government’s focus, according to the minister, is therefore on preserving macroeconomic gains while creating greater space for private sector participation in the economy.
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