Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb has said Pakistan is moving away from reliance on aid-based assistance and is positioning itself for trade- and investment-driven engagement to secure long-term economic sustainability. Speaking in an interview with CNN Business Arabia, the Finance Minister said the shift reflects renewed economic confidence and a clear reform direction articulated by the Prime Minister, with a particular focus on strengthening partnerships with Gulf Cooperation Council (GCC) countries.
Senator Aurangzeb said Pakistan’s economic reset has been underpinned by a sustained macroeconomic stabilization programme over the past 18 months, delivering measurable outcomes. Inflation, which had surged to a historic high of 38 percent, has been brought down to single-digit levels, easing pressure on households and businesses. He added that fiscal discipline has resulted in primary surpluses, while the current account deficit has remained within targeted limits, signaling improved balance of payments management.
The Finance Minister noted that exchange rate stability and strengthening foreign exchange buffers have further reinforced confidence. Foreign exchange reserves have improved to cover around 2.5 months of imports, reflecting gradual rebuilding of external resilience after a prolonged period of volatility.
Highlighting external validation of Pakistan’s improving outlook, Senator Aurangzeb pointed to two key developments. All three major international credit rating agencies have upgraded Pakistan’s ratings and outlook during the year, aligning their assessments for the first time in several years. In addition, Pakistan has successfully completed the second review under the IMF Extended Fund Facility, with the IMF Executive Board approving the review earlier this week. He said these milestones demonstrate growing international trust in Pakistan’s economic management and reform trajectory.
According to the Finance Minister, macroeconomic stability has been achieved through coordinated monetary and fiscal policies, complemented by a wide-ranging structural reform agenda. Reforms are underway across taxation, energy, state-owned enterprises, public financial management and privatization, with the objective of consolidating stability and enabling sustainable, investment-led growth.
On taxation, Senator Aurangzeb said Pakistan has made notable progress in improving its tax-to-GDP ratio, which stood at 8.8 percent at the start of the reform programme. This increased to 10.3 percent in the last fiscal year, with a defined pathway toward 11 percent. He explained that the strategy focuses on expanding the tax base by bringing under-taxed yet economically significant sectors such as real estate, agriculture, and wholesale and retail trade into the formal system, while improving compliance through production monitoring systems and AI-enabled tools. Reforms in tax administration, he added, are targeting improvements in people, processes and technology.
In the energy sector, the Finance Minister outlined measures aimed at improving governance in power distribution companies, advancing privatization, reducing circular debt and rationalizing tariffs. He said these steps are critical to making energy more competitive for industry and supporting industrial revival.
Senator Aurangzeb acknowledged the longstanding role of GCC countries, including Saudi Arabia, the UAE and Qatar, in supporting Pakistan through financing and cooperation at international institutions such as the IMF. He said the relationship is now evolving toward deeper trade and investment ties. Remittances remain a key pillar of external stability, reaching around USD 38 billion last year and expected to rise to USD 41–42 billion this year, with more than half originating from GCC states.
Looking ahead, the Finance Minister said Pakistan is actively engaging GCC partners to attract investment in priority sectors such as energy, oil and gas, minerals and mining, artificial intelligence, digital infrastructure, pharmaceuticals and agriculture. He also expressed optimism about progress toward a Free Trade Agreement with the GCC, noting that discussions are at an advanced stage.
Reaffirming the government’s direction, Senator Aurangzeb said Pakistan’s future lies in productive trade and investment partnerships rather than aid dependence. He added that foreign direct investment into key sectors will drive higher growth, job creation and shared economic gains, stressing that the government is fully mobilized to translate this strategy into sustained outcomes.
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