Khurram Shehzad, Advisor to the Federal Finance Minister, reiterated the government’s commitment to long-term economic sustainability during his address at the workshop titled “Economic and Debt Outlook 2025,” organized by the Financial Market Association of Pakistan. Shehzad highlighted that the government has been taking a series of comprehensive steps to ensure economic stability and growth, which have already yielded positive results in key economic indicators.
According to Shehzad, Pakistan’s economic performance has shown signs of improvement, with positive growth across various sectors. This growth, he stated, is the result of the government’s robust economic measures, which have contributed to improved GDP, enhanced foreign exchange reserves, reduced inflation, and a more favorable policy rate. Furthermore, Shehzad projected that Pakistan’s international credit rating is expected to improve further in the current fiscal year, signaling growing international confidence in the country’s economic trajectory.
One of the main objectives of the Ministry of Finance, as outlined by Shehzad, is to address fiscal imbalances while also promoting inclusive, export-led growth. Shehzad emphasized that the government’s focus is on building a sustainable economic framework that can support long-term prosperity, rather than seeking short-term relief measures. Structural reforms aimed at ensuring long-term fiscal sustainability are at the core of the government’s strategy, with efforts directed at strengthening Pakistan’s overall economic foundation.
The Advisor also pointed out that several key economic indicators are reflecting positive growth. The country’s tax-to-GDP ratio has remained above the targets set by the International Monetary Fund (IMF), and the current account balance is in a stable position. This, Shehzad noted, demonstrates the government’s successful efforts in fiscal discipline and balancing economic priorities.
On the topic of currency stability, Shehzad addressed the common market sentiment that both the government and the State Bank of Pakistan (SBP) should intervene to bolster the value of the local currency. While acknowledging these concerns, he defended the SBP’s decisions, noting that its actions have not only helped stabilize the exchange rate but have also been positively received by international financial institutions. According to Shehzad, these decisions have contributed to overall economic stability, reinforcing Pakistan’s fiscal health on the global stage.
Looking ahead, Shehzad discussed the government’s strategic move to reduce the country’s reliance on domestic banking sector financing by diversifying debt sources. This, he explained, would help improve Pakistan’s debt profile, making the economy more resilient to external shocks. The government is also pursuing a series of public finance reforms, such as optimizing the operations of state-owned entities (SOEs) and addressing inefficiencies in the energy sector.
Regarding the privatization of state-owned entities, Shehzad shared that several initiatives are currently underway. The privatization of key institutions, including Pakistan International Airlines (PIA), House Building Finance Corporation (HBFC), and others, is being actively considered. He mentioned that significant progress has been made with PIA, which has resumed flights to Europe, and the resumption of flights to the UK is expected by the end of January or February.
The privatization process for HBFC is moving forward, with the bidding phase scheduled to begin soon, and plans to privatize ZTBL are also in the pipeline. These efforts, Shehzad explained, are aimed at increasing operational efficiency and reducing the fiscal burden on the government.
To enhance revenue collection and tax compliance, Shehzad detailed several ongoing initiatives, including tax reforms, the digitization of the tax system, and the separation of tax policy and tax collection functions. The government, he emphasized, is committed to ensuring that all citizens pay taxes and file their returns. Additionally, he announced ongoing discussions with provincial governments regarding a National Fiscal Pact, particularly aimed at introducing agricultural taxes, with positive responses already received from three provinces.
In conclusion, Shehzad reaffirmed the government’s resolve to focus on long-term economic stability and sustainability, prioritizing structural reforms, fiscal discipline, and transparent governance. As the government continues to implement these reforms, Pakistan is expected to experience stronger and more sustainable growth in the years ahead, supported by sound economic policies and a commitment to reducing reliance on external debt.
The workshop also featured insights from Eraj Hashmi, Director of the Debt Management Office (DMO) at the Ministry of Finance, who stressed the importance of capacity building and reforms in debt management as part of Pakistan’s broader shift toward sustainable finance.