ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday launched Pakistan’s Economic Governance Reforms, declaring that the country had moved beyond crisis management after two years of tough but necessary decisions, which had restored stability, reduced inflation to a record-low 4.5 percent, and increased foreign exchange reserves to USD21 billion.
In a video-linked address at the launch of the Prime Minister’s Economic Governance Reforms, Sharif highlighted the dire state of the economy when the government took office in early 2024, describing it as marked by nearly 30 percent inflation, critically low foreign exchange reserves, weakened institutions, and Pakistan’s marginalisation from global economic engagement, adding that the scale of the crisis left no room for shortcuts or populism.
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He highlighted the tough choices made during the two years, noting: “Restoring the economy required hard decisions that spared no political constituency. We had to withdraw unsustainable subsidies, restore fiscal discipline, strengthen public financial management, and initiate long-delayed privatisation reforms. These were not cosmetic fixes, but unavoidable structural reforms.” Sharif pointed to significant progress, citing a sharp drop in inflation from 29.2 percent to 4.5 percent, with foreign exchange reserves more than doubling from $9.2 billion to over USD21 billion.
“The current account improved from a USD3.3 billion deficit to a USD1.9 billion surplus, and we moved from a primary deficit to a primary surplus, narrowing our overall fiscal deficit,” he added.
The prime minister also emphasised revenue reforms, stating that Pakistan had corrected long-standing distortions.
“The tax-to-GDP ratio rose from around 8 percent to over 10 percent, and more than one million new taxpayers have joined the formal economy. Tax collection grew by 26 percent in 2025, aided by large-scale digitisation of government systems,” he added.
Sharif pointed to the success of the e-procurement platform, ePADS, which now covers over 1,000 federal agencies and half a million contracts, integrated in real-time with FBR, NADRA, and SECP. He also highlighted the privatisation of state-owned enterprises (SOEs), including Pakistan International Airlines and First Women Bank. “These steps mark a break from decades of inaction. Further reforms in state-owned enterprises are underway,” he added.
“Our stabilisation and reform efforts have been recognised by international credit rating agencies and development partners,” he added.
Looking ahead, the prime minister stressed that with macroeconomic indicators stabilised, Pakistan’s focus now shifts to accelerating growth, expanding exports, and making the country a more attractive place for business. “Our reform agenda represents a shift from crisis management to institution-building,” Sharif said.
The prime minister also emphasized the long-term nature of the reforms, noting that the Economic Governance Reforms comprise 142 actions, including 59 priority reforms and 83 complementary measures to be implemented by 58 institutions within defined timelines.
Key areas include taxation, energy, privatisation, SOEs, pensions, tariff rationalisation, regulatory simplification, rightsizing of the federal government, and digital governance.
“These reforms are a home-grown, irreversible agenda aimed at embedding stability into institutions and enabling sustainable, private-sector-led growth. The people of Pakistan have paid a heavy price. We cannot return to business as usual, and we will not look back,” Sharif concluded.
Earlier, Federal Minister for Finance and Revenue, Muhammad Aurangzeb, provided an overview of the economic reforms and performance indicators.
He said 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 in the first five months of FY26.
Aurangzeb also highlighted improvements in fiscal discipline, noting consecutive primary surpluses, including a 2.7 percent surplus of GDP. The tax-to-GDP ratio reached 10.2 percent in FY25, the highest in 25 years.
On the external front, he said the State Bank’s reserves had risen to USD15.9 billion, the highest in four years, with import cover improving to 2.6 months. The current account deficit stood at USD812 million in the first five months of FY26, well within targets. Remittances reached USD38 billion in FY25, and Roshan Digital Account inflows rose to USD11.5 billion.
Aurangzeb concluded with optimism, stating that renewed investor confidence was evident in a stable exchange rate, expanding private sector credit, a 52 percent rise in the Pakistan Stock Exchange in dollar terms during 2025, a surge in IPOs, and near-complete digitalisation of company registrations.
Copyright Business Recorder, 2026
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