ISLAMABAD: Pakistan expects to receive USD1.2 billion from the IMF and achieve 3.5percent economic growth this fiscal year, Finance Minister Muhammad Aurangzeb said, citing progress in reforms and global recognition of the country’s economic stability.
Aurangzeb told CGTN America that Pakistan’s economy is showing signs of recovery, with inflation falling to single digits and monetary policy easing. He confirmed that a staff-level agreement with the IMF has been reached, granting Pakistan access to USD1.2 billion once approved by the fund.
He highlighted that IMF assistance in September 2024 helped stabilise Pakistan’s USD370billion economy and contributed to currency stabilisation. He said Pakistan’s GDP grew by 3 percent last year, with an original target of over 4 percent for the current fiscal year. “Recent floods may shave off some growth, but we remain hopeful of achieving around 3.5percent,” he added, emphasising ongoing recovery measures in agriculture and other sectors affected by natural disasters.
Impact on growth, inflation, C/A by flooding: IMF paints likely grim scenario
Aurangzeb called climate change an ‘existential issue’ for Pakistan, citing repeated flooding events that impact major crops such as rice and cotton.
The Finance Minister underscored the success of the second phase of the China-Pakistan Economic Corridor (CPEC), with 24 joint venture agreements recently signed in Beijing. Phase two focuses on monetizing infrastructure through private sector investments in minerals, agriculture, IT, AI, and pharmaceuticals. He cited the example of a truck tire manufacturing joint venture that now exports 80 percent of its products and may list on the Hong Kong Stock Exchange.
Aurangzeb noted progress in structural reforms, including taxation, energy, and public finance, with privatization efforts advancing. “This fiscal year, the first bank on the privatisation list has been successfully handed over, and Pakistan’s national airline is expected to be privatised before year-end.”
The minister also highlighted access to commercial markets, including Middle Eastern bank borrowing and plans to issue an inaugural Panda bond. Digital transformation remains a priority, with initiatives aimed at documenting cash transactions, improving tax collection, and enhancing government payment systems. Pakistan has successfully negotiated tariff agreements with the United States, benefiting textile exporters, particularly in home textiles.
Aurangzeb noted that global trade challenges, including US tariffs, present opportunities for Pakistan to diversify partnerships, including engagements with Central Asian countries. “Pakistan’s economic achievements have also been appreciated at the global level. Three major international rating agencies improved Pakistan’s credit rating. The country’s GDP grew by 3 per cent in the last fiscal year, and the target for this year was a growth of more than 4 percent,” he said.
However, he pointed to a recent success: the United Arab Emirates–nominated International Holding Company (IHC) acquired a majority stake in the state-owned First Women Bank Limited (FWBL).
The improved economic indicators have enabled Pakistan to return to international financial markets. “We tapped Middle Eastern bank borrowing again after a gap of about two and a half years,” Aurangzeb said, adding that the country is now preparing to issue its inaugural Panda bond—Renminbi-denominated bonds—for the Chinese market.