Aurangzeb interacts with UAE banks for Pak fiscal support, development

ISLAMABAD: With the possibility of securing increased commercial loans in the upcoming budget and materializing a $1 billion loan by the end of June, Minister for Finance Muhammad Aurangzeb has assured the UAE-based banks of staying on course to consolidate the current economic stability backed by difficult but necessary reforms.

Top official sources confirmed to The News on Monday that the ADB Board was scheduled to approve its guarantee for provision of loan facility from the Standard Chartered Bank (SCB) by the end of the ongoing month and this transaction was expected to be accomplished within June 2025.

An official announcement by the Ministry of Finance Monday said the Ministry of Finance Monday held a series of virtual meetings with Sharjah Islamic Bank, Abu Dhabi Islamic Bank, and Ajman Bank for their support to Pakistan’s development and fiscal objectives.

These meetings were chaired by the Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb and attended by senior officials of the Finance Division and other relevant stakeholders.

The finance minister thanked the Standard Chartered Bank and Dubai Islamic Bank for their valuable role in organizing these interactions and facilitating engagement with potential partners. The minister also appreciated the Asian Development Bank’s collaboration and support for supporting Pakistan’s fiscal and development goals.

In his remarks, he highlighted Pakistan’s steady progress toward macroeconomic stability, stating, “We have come a long way — this year we are on track to close with a year-long current account surplus, a primary surplus, and forex reserves approaching USD 14 billion, providing three months of import cover.”

He added that inflation had eased to 0.3 percent and the policy rate had also come down significantly, showing a positive outlook for the economy.

The minister emphasized that structural reforms in the country formed the basis of this recovery and underscored 1government was firmly committed to long-term reforms, including the restructuring of state-owned enterprises, an active privatization program, and rightsizing of the federal government.

“We have broken away from the old boom and bust cycle. The current stability is backed by difficult but necessary reforms, and we are staying the course,” he said.

On the revenue side, he shared that Pakistan was set to reach a tax-to-GDP ratio of 10.6 percent by June 2025, with a target of 11 percent in the next fiscal year. The government is prioritizing FBR reforms and end-to-end digitization to broaden the tax base and improve compliance. He also noted that the ongoing progress was backed by the approval of disbursement of the second tranche under the IMF’s Extended Fund Facility (EFF) and approval of USD 1.3 billion under the new Resilience and Sustainability Fund (RSF).

Pakistan has met all quantitative targets under the IMF program and has also achieved key structural benchmarks, including the introduction of agricultural income tax — a milestone measure in the country’s fiscal history.

The minister also referenced the recent improvement in Pakistan’s sovereign credit rating by Fitch as a reflection of market confidence. Looking ahead, the finance minister emphasized Pakistan’s shift towards a productivity and export-led growth model.

He pointed to the robust growth in the IT sector, with exports reaching USD 3.4 billion in March, and momentum in the minerals and mining sector. He mentioned that the Reko Diq project had stimulated interest in Pakistan’s mining potential and “we aim to leverage copper reserves both for exports and energy transition”.

During the interactive sessions, senior executives of the three banks acknowledged the progress and shared their comments and views on Pakistan’s economic plans.

The meeting concluded with mutual interest in continuing the dialogue and exploring potential avenues for collaboration. The finance minister reaffirmed Pakistan’s openness to quality commercial partnerships that contribute to economic growth, development financing, and investor confidence.

In a separate meeting, Senator Aurangzeb met a high-level delegation from Deloitte, led by Richard Longstaff, Managing Director and Head of Energy/Critical Minerals, and Sofyan Yusufi, Partner at Deloitte Risk and Financial Advisory – Government and Public Services.

The meeting was a follow-up to earlier discussions held on the sidelines of the IMF/World Bank Spring Meetings 2025 in Washington D.C., where avenues for collaboration in critical minerals, energy sector reforms, privatization, and operationalization of the Country Partnership Framework (CPF) were explored.

Welcoming the Deloitte team to Pakistan, the finance minister appreciated their continued engagement and interest in supporting Pakistan’s development priorities. He emphasized the government’s commitment to leveraging private sector expertise to fast-track structural reforms and promote productivity and export-led economic growth.

The meeting focused on the operationalization of the CPF and leveraging Deloitte’s technical advisory and global experience for Pakistan’s ongoing initiatives, which should be outcome based and standardized, streamlined project development in different sectors, including health, climate, energy, mining and minerals and the public-private initiatives.

The delegation apprised the minister of their upcoming meetings with key stakeholders, including officials from the World Bank (WB), Asian Development Bank (ADB), and the Economic Affairs Division (EAD).

The finance minister shared insights from his recent meeting with the World Bank President Ajay Banga, highlighting Pakistan’s commitment to responsible and transparent utilization of financing.

He reaffirmed that the government was focused on two overarching national priorities — climate resilience and population management — both of which were being supported through significant funding, including the recently approved Resilience and Sustainability Facility (RSF) of $1.3 billion.

“At this stage of our reform journey, what Pakistan needs is not financing — it is strategic, tactical support and global expertise from our bilateral and multilateral partners,” remarked the minister.

The meeting also included an in-depth discussion on structuring future collaboration and defining key priority areas where Deloitte’s assistance could be instrumental. The Deloitte team expressed strong appreciation for the positive economic indicators emerging from Pakistan and reiterated their commitment to working closely with the Government of Pakistan to support its reform and development agenda.