Pakistan has moved beyond the phase of macroeconomic stabilization and is now entering a period focused on sustainable, private sector-led economic growth, according to Advisor to the Finance Minister Khurram Schehzad. Khurram Schehzad made the remarks while addressing the Future of Finance Summit 2026, organized by the Institute of Cost and Management Accountants of Pakistan at the Pearl Continental Hotel in Karachi. He attended the event as Guest of Honour, which brought together policymakers, financial experts, corporate and business leaders, investors, professionals and other stakeholders from Pakistan’s financial sector.
During his address, the Advisor said Pakistan’s economy had undergone a significant turnaround over the past two to three years, moving from a period of severe economic stress and external vulnerability toward greater macroeconomic stability and renewed economic expansion. He said the current phase is increasingly centered on structural reforms, investor confidence and strengthening the foundations required for sustainable growth. Pakistan’s gross domestic product growth has recovered to 3.7%, while agriculture expanded by 2.89%. Large-Scale Manufacturing recorded growth of 6.1%, which Khurram Schehzad described as its strongest performance in around four years.
He also highlighted improvements in fiscal and external indicators. The fiscal deficit remained below 1% of gross domestic product during the first nine months of fiscal year 2026, while the country’s debt-to-GDP ratio declined from around 75% to 68%. The country’s external position has also improved, according to the Advisor. The current account deficit narrowed to less than $140 million from around $17.5 billion in 2022. At the same time, foreign exchange reserves held by the State Bank of Pakistan increased from around $3 billion in early 2023 to more than $18 billion, supported by stronger organic foreign exchange inflows.
Khurram Schehzad also pointed to international recognition of Pakistan’s improving economic position. He highlighted S&P Global Ratings’ upgrade of Pakistan’s sovereign rating to B with a Stable Outlook, describing it as the country’s highest S&P rating in around eight to nine years. According to the Advisor, the upgrade reflects progress in macroeconomic stabilization, fiscal consolidation, rebuilding foreign exchange reserves and continuing structural reforms.
He said reforms are advancing across several areas, including privatization and state-owned enterprises, energy, taxation, tariffs, public debt management, pensions, rightsizing, digitization and access to finance. Early effects of these measures are becoming visible through nearly 15% growth in private sector credit, 11 initial public offerings, the highest number in more than two decades, and the incorporation of more than 43,000 new companies during fiscal year 2026. The Advisor also noted the expanding investor base at the Pakistan Stock Exchange, including increasing participation from younger investors and Generation Z.
Highlighting developments related to investment and privatization, Khurram Schehzad welcomed the strong investor interest in Faisalabad Electric Supply Company. Twelve domestic and international investors, including groups from Pakistan, Türkiye and China, have expressed interest in the transaction. He described the participation as an encouraging signal of confidence in Pakistan’s investment environment and privatization outlook.
On fiscal policy, he said the Budget for fiscal year 2027 represents an important policy shift toward productive sectors, including industry, businesses, exporters, small and medium-sized enterprises and agriculture. The measures are aimed at reducing the cost of doing business, improving access to finance, strengthening competitiveness and creating conditions for private sector-led growth. Pakistan’s wider investment landscape is also showing signs of increased activity. Khurram Schehzad said 79 foreign companies entered Pakistan between 2023 and 2025, compared with 19 exits during the same period. He also pointed to increasing domestic investor participation, corporate activity and interest in major privatization transactions.
The Advisor highlighted the performance of Sukuk as an increasingly attractive investment avenue and welcomed greater participation by younger investors in Pakistan’s capital markets. He also referred to the expansion of Pakistan’s investment and strategic relationships, including the inclusion of Türkiye in an expanded Pakistan-Saudi Arabia defence partnership, which he said would strengthen Pakistan’s strategic partnerships and regional standing. Looking ahead, the government is working on a comprehensive industrial policy and a medium-term tax policy aimed at improving competitiveness and providing greater policy predictability for both domestic and international investors.
Khurram Schehzad said Pakistan’s economic direction is increasingly defined by three interconnected priorities: macroeconomic stability as the foundation, structural reforms as the enabler and the private sector as the engine of sustainable growth. He reaffirmed the government’s focus on accelerating reforms, attracting domestic and foreign investment and building an investment-driven, export-oriented and sustainable growth model for Pakistan.
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