WASHINGTON: Pakistan’s economy has shown strong signs of recovery, with key macroeconomic indicators reflecting renewed stability and growth momentum. Inflation has dropped to single digits, fiscal and external accounts have strengthened, and international confidence in the country’s economy is rising after nearly three years.
In an interview with CGTN America during his visit to Washington D.C. for the IMF–World Bank Annual Meetings, Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, highlighted Pakistan’s continued progress in macroeconomic stabilization, structural reforms, and growth-oriented policies.
Over the past year, Pakistan’s economy has recorded steady improvement. The exchange rate has remained stable, foreign exchange reserves now cover about 2.5 months of imports, and the policy rate has been reduced by half. Major global rating agencies—Fitch, S&P, and Moody’s—have all upgraded Pakistan’s outlook, signaling renewed investor confidence.
The Finance Minister confirmed that the IMF recently completed its second review under the Extended Fund Facility, leading to a staff-level agreement. The IMF has expressed confidence in Pakistan’s reform agenda, which focuses on taxation, energy, public finance, and privatization.
Pakistan’s privatization program has also gained traction, with the first successful transaction of the fiscal year involving the sale of a small bank to a UAE-based conglomerate. Additional privatization efforts are underway, including the national airline, which is expected to be completed before the end of the fiscal year.
Senator Aurangzeb noted that Pakistan has regained access to international financial markets after a two-year gap. The government has secured new borrowing from Middle Eastern banks and is preparing to issue its inaugural Panda Bond before the end of the year. He added that Pakistan has successfully repaid a $500 million Eurobond and remains on track to meet the next $1.3 billion repayment due in April 2026.
Despite the impact of recent floods, Pakistan’s GDP growth for FY2025–26 is projected at around 3.5 percent. The Minister emphasized that climate change remains a major challenge, particularly for the agriculture sector, which has faced damage to rice and cotton crops.
On the international front, Senator Aurangzeb reaffirmed the strength of Pakistan’s partnership with China, particularly through the launch of CPEC Phase 2.0. The new phase emphasizes industrial cooperation and private investment. During the Prime Minister’s recent visit to Beijing, 24 new joint ventures were signed in sectors including mining, agriculture, IT, artificial intelligence, and pharmaceuticals.
The government’s digital transformation drive is another key reform area. Led by the Prime Minister, this initiative focuses on digitizing government payments and improving transparency through technology. As a result, Pakistan’s tax-to-GDP ratio has increased from 8.8 percent to 10.2 percent, supported by data analytics and AI-driven improvements in tax administration.
Senator Aurangzeb also discussed Pakistan’s efforts to diversify trade. The country recently concluded tariff negotiations with the United States, securing favorable terms for textile exports, especially in home textiles. Pakistan is also expanding trade partnerships with Central Asian nations and deepening South–South economic cooperation.
Referring to the Shanghai Cooperation Organization Summit held in Tianjin, China, the Finance Minister expressed Pakistan’s support for President Xi Jinping’s Global Governance Initiative, highlighting its alignment with Pakistan’s commitment to multilateralism and sovereign equality.
Concluding the interview, Senator Muhammad Aurangzeb reiterated that Pakistan remains dedicated to achieving sustainable economic growth through continued reform, strengthened resilience, and an inclusive development agenda.
