Pakistan’s economy: Aurangzeb calls for urgent course correction

KARACHI: Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, on Wednesday stressed on the need for a fundamental shift from reactive policy-making to a forward-looking one as well as a reforms-driven approach to strengthen Pakistan’s economy, restore investor confidence and come up with modalities for sustainable growth.

Addressing the inaugural session of The Future Summit – 9th Edition here, organized by Nutshell Group and co-hosted by National Bank of Pakistan, the minister outlined the government’s commitment to structural reforms, fiscal discipline, and strategic partnerships to redefine the country’s economic direction.

He shared global and national perspectives drawn from his recent engagements in Washington and Riyadh, noting that the world economy has demonstrated greater resilience than anticipated, aided by structural reforms and enhanced private sector participation in many countries.

Pakistan’s economy showing major signs of recovery, Aurangzeb tells CGTN

He underscored the growing global consensus on phasing out government role and promoting productivity-led and private sector–driven growth, alongside opportunities in artificial intelligence and technology-led innovation.

Turning to Pakistan, the Finance Minister reaffirmed that macroeconomic stability has been achieved and externally validated, with major rating agencies upgrading Pakistan’s outlook. The IMF’s second review under the ongoing program concluded successfully. However, he emphasized, macro stability is not an end in itself but a means to an end; forming the foundation for sustained investment and long-term growth.

Highlighting encouraging trends, he noted that corporate profitability in Pakistan has risen by 14 percent during the first nine months of 2025, and that 73% of CEOs (in the latest OICCI) survey now consider Pakistan a viable investment destination, up from 61 percent earlier. These indicators, he said, reflect growing investor confidence and the country’s improving direction.

Senator Aurangzeb pointed to a conflux of favourable factors including macro stability and geopolitical tailwinds that now position Pakistan to convert bilateral support into trade and investment flows led by the private sector.

He reaffirmed the government’s commitment to providing an enabling ecosystem in priority sectors such as minerals and mining, IT, agriculture, pharmaceuticals, and the blue economy. Discussing technological advancement and the knowledge-based economy, the Minister welcomed Google’s decision to open an office in Pakistan and to make the country a regional technical and export hub.

He emphasized the need to equip youth with digital and technical skills to help them capture higher-value opportunities in coding, block-chain, and AI-driven sectors.

On structural reforms, Senator Aurangzeb stressed that Pakistan is “no longer in a design phase but in the implementation mode.”

He spoke of progress in areas such as taxation, energy, state-owned enterprises, privatization, public finance management, rightsizing of government, pension reforms, and debt servicing.

He highlighted the use of AI-led monitoring and invoicing systems to curb leakages in tax collection, the addition of 900,000 new tax filers, and international recognition of Pakistan’s reform efforts by the World Bank. He reaffirmed the government’s commitment to privatization, noting the recent acquisition of a local bank by a major UAE conglomerate and ongoing work on the PIA and power distribution companies’ transactions. He also shared updates on the right-sizing of federal ministries and departments, closure of loss-making entities like Utility Stores Corporation and PASCO, and the transition to a defined-contribution pension scheme for new government entrants.

Addressing the summit’s theme of “Course Correction,” the Finance Minister said that while Pakistan must stay the course on structural reforms. Urgent course correction is needed in two existential areas: population growth and climate change. He called for a national sense of urgency to tackle population growth, child stunting, learning poverty, and to fully utilize the dollars 2 billion climate-related financing available under the World Bank’s Country Partnership Framework. He reaffirmed the government’s resolve for sustained economic reforms, strengthen resilience, and advance a reform agenda focused on long-term sustainability and human development.

Finance Minister Muhammad Aurangzeb said on Wednesday that the International Monetary Fund (IMF) Executive Board is likely to approve Pakistan’s next loan tranche in early December 2025.

He said Pakistan and the IMF had reached a staff-level agreement (SLA) in Washington, D.C. in mid-October, paving the way for the disbursement of around USD1.2 billion under the ongoing program.

“The IMF is expected to give formal approval for the next USD1.2 billion tranche by early December,” Aurangzeb said.

Copyright Business Recorder, 2025