ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday formally launched Pakistan’s Economic Governance Reforms, asserting that the country has moved beyond a prolonged phase of crisis management after two years of difficult but necessary economic decisions. Addressing the launch ceremony via video link, the prime minister said these measures have restored macroeconomic stability, sharply reduced inflation, and rebuilt foreign exchange buffers, setting the stage for sustainable, long-term growth.
Sharif recalled the economic conditions inherited by the government in early 2024, describing them as among the most challenging in Pakistan’s history. Inflation was nearing 30 percent, foreign exchange reserves were critically low, institutions were weakened, and Pakistan had become increasingly isolated from global economic engagement. He noted that the severity of the crisis left no space for populist measures or short-term fixes, requiring hard structural decisions across the board.
According to the prime minister, restoring economic stability demanded politically difficult choices that affected all segments of society. These included the withdrawal of unsustainable subsidies, restoration of fiscal discipline, strengthening of public financial management, and the initiation of long-delayed privatisation reforms. He stressed that these steps were structural in nature rather than symbolic, aimed at correcting deep-rooted imbalances rather than offering temporary relief.
Sharif highlighted key indicators to demonstrate progress, noting that inflation had fallen sharply from 29.2 percent to a record-low 4.5 percent. Foreign exchange reserves more than doubled, rising from USD9.2 billion to over USD21 billion. He added that the current account position improved significantly, shifting from a USD3.3 billion deficit to a USD1.9 billion surplus, while the government moved from a primary deficit to a primary surplus, narrowing the overall fiscal gap.
Revenue reforms were another central pillar of the government’s strategy, the prime minister said. Long-standing distortions in the tax system were addressed, resulting in an increase in the tax-to-GDP ratio from around 8 percent to over 10 percent. More than one million new taxpayers entered the formal economy, while tax collection grew by 26 percent in 2025, supported by large-scale digitisation initiatives.
He pointed to digital governance as a transformative tool, citing the success of the e-procurement platform ePADS. The system now covers more than 1,000 federal agencies and over half a million contracts, and is integrated in real time with the Federal Board of Revenue, NADRA, and the Securities and Exchange Commission of Pakistan. Sharif also highlighted progress in privatisation, including transactions involving Pakistan International Airlines and First Women Bank, calling these steps a break from decades of stalled reform efforts.
The prime minister noted that Pakistan’s stabilisation and reform agenda has gained recognition from international credit rating agencies and development partners. With macroeconomic indicators stabilised, he said the government’s focus is now shifting toward accelerating growth, expanding exports, and making Pakistan a more attractive destination for investment. He described the reform drive as a transition from short-term crisis response to long-term institution-building.
Sharif emphasised that the Economic Governance Reforms are comprehensive and time-bound, comprising 142 actions, including 59 priority reforms and 83 complementary measures. These reforms are to be implemented by 58 institutions across key areas such as taxation, energy, privatisation, state-owned enterprises, pensions, tariff rationalisation, regulatory simplification, rightsizing of the federal government, and digital governance.
Earlier, Federal Minister for Finance and Revenue Muhammad Aurangzeb presented an overview of economic performance and reform outcomes. He reported that GDP growth reached 3.1 percent in FY25 and accelerated to 3.71 percent in the first quarter of FY26. Despite climate-related shocks, inflation remained contained at around 5 percent during the first five months of FY26.
Aurangzeb highlighted sustained fiscal discipline, including consecutive primary surpluses, with a surplus of 2.7 percent of GDP. The tax-to-GDP ratio reached 10.2 percent in FY25, the highest level in 25 years. On the external front, State Bank reserves rose to USD15.9 billion, import cover improved to 2.6 months, and the current account deficit remained within targets. He also cited record remittances of USD38 billion, rising Roshan Digital Account inflows, a stable exchange rate, expanding private sector credit, and strong capital market performance as signs of renewed investor confidence.
Concluding the launch, the prime minister stressed that the reforms are home-grown, irreversible, and aimed at embedding stability into Pakistan’s institutions to support sustainable, private-sector-led growth, warning that the country cannot afford a return to past practices.
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