ISLAMABAD: Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb Thursday said Pakistan had consolidated macroeconomic stability over the past year, backed by external validations from the IMF and major global rating agencies.
He was speaking at an extensive session at The Atlantic Council in Washington, DC, on the theme “Reform efforts in Pakistan and the challenges ahead.”
The session was opened by Fred Kempe, President and CEO of The Atlantic Council, and moderated by Dr. Aasim M. Husain, former Deputy Director of the IMF’s Middle East and Central Asia Department.
Aurangzeb noted that the government’s disciplined fiscal management had restored confidence, improved sovereign spreads and contributed to the first current account surplus in 14 years.
Talking about the recent floods, he said Pakistan was facing two existential challenges — population growth and climate change and highlighted the government’s decision to finance rescue and relief efforts through domestic resources rather than external appeals, reflecting strengthened fiscal capacity.
He added that the government had launched a 300-day national plan to accelerate rehabilitation and build climate resilience, while revising growth forecasts modestly to above 3 percent for FY2025. On fiscal reforms, the minister emphasized ongoing structural changes aimed at broadening and deepening the tax base.
He outlined recent initiatives to bring agriculture, retail, and real estate sectors into the tax net, improve compliance through technology and AI-driven analytics, and curb leakages in sales tax collection. He reaffirmed the government’s commitment to raise the tax-to-GDP ratio from 10.2% to 11% this year, and to 13% over the medium term, ensuring fiscal sustainability.
Discussing intergovernmental fiscal relations, Senator Aurangzeb highlighted the National Fiscal Pact signed with provincial governments, setting the stage for deliberations on a new NFC Award. He informed that the inaugural NFC meeting is expected to convene in early November after being deferred due to the flood situation.
Turning to the medium-term growth outlook, the minister reiterated that Pakistan was pursuing a private sector-led, export-driven growth model.
He noted that the new National Tariff Policy aimed to reduce import dependence and enable export competitiveness through the gradual reduction of customs and regulatory duties on raw materials and intermediate goods. He cited emerging opportunities in IT, mineral exports, and projects like Reko Diq as future growth drivers.
The session concluded with Dr. Husain commending the minister’s reform agenda and wishing continued success for Pakistan’s economic recovery and transformation.