Muhammad Aurangzeb, Finance Minister of Pakistan, has said that the country’s economy is showing strong signs of consolidation and renewed investor confidence after a year marked by fiscal discipline, policy reforms, and successful engagement with the International Monetary Fund. In a recent interview with CGTN America, the minister highlighted macroeconomic stabilization achievements that have helped ease pressure on external accounts and strengthen Pakistan’s global economic position.
The government’s measures have stabilized the rupee, improved foreign exchange reserves to around 2.5 months of import cover, and pushed inflation back to single digits. Aurangzeb said that the policy rate has been halved, and all three major credit rating agencies — Fitch Ratings, S&P Global Ratings and Moody’s Corporation — have upgraded Pakistan this year. These upgrades, he said, have reopened access to commercial markets after more than two years of limited international financing.
The minister noted that the IMF recently completed its second review under the Extended Fund Facility, reaching a staff-level agreement with Pakistan. He explained that this agreement reflects trust in Pakistan’s economic management and reinforces the government’s commitment to structural reforms in taxation, energy, privatization, and public finance. He emphasized that the government has stayed consistent in implementing these reforms, pointing to the successful privatization of a small bank acquired by a UAE-based conglomerate. He added that the privatization of Pakistan International Airlines is expected to be completed before the end of the fiscal year.
Aurangzeb underscored the significance of Pakistan’s smooth repayment of a $500 million Eurobond in September, describing it as a “total non-event” that demonstrated investor confidence in the country’s debt management capabilities. Pakistan now plans to issue its inaugural Panda bond and refresh its Global Medium-Term Note (GMTN) program for a larger international bond issuance in 2026.
Despite these macroeconomic gains, the minister cautioned that climate change remains an existential threat. Recent floods have damaged key crops like rice and cotton, which are expected to reduce GDP growth projections from 4% to around 3.5%.
On the external front, Aurangzeb said the second phase of the China–Pakistan Economic Corridor (CPEC 2.0) focuses on monetizing infrastructure through joint ventures in strategic sectors including mining, agriculture, IT, and pharmaceuticals. He shared that 24 joint venture agreements were signed recently in Beijing, marking a shift toward private-sector-led economic engagement between Pakistan and China.
Aurangzeb also emphasized the country’s accelerating digital transformation agenda, revealing plans to digitize all government payments by June next year. The use of AI-led monitoring and analytics has already contributed to improving the tax-to-GDP ratio from 8.8% to 10.2%.
The finance minister also noted that Pakistan’s recent 19% tariff deal with the United States Department of Commerce would create new opportunities for textile exporters, particularly in the home textile segment. Meanwhile, the government continues to pursue trade diversification with Central Asian countries to reduce dependence on traditional markets.
“Macroeconomic stability is not an end in itself; it’s a means to an end,” Aurangzeb said. “Pakistan is now moving from stabilization toward sustainable and resilient growth despite global economic headwinds and the risks posed by climate change.”
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