Finance Minister Muhammad Aurangzeb says structural reforms, lower energy costs, tax improvements and private investment are central to achieving sustainable, export-led economic growth.
Pakistan is pursuing a series of structural reforms to strengthen economic stability, increase exports and encourage private investment, Federal Minister for Finance and Revenue Muhammad Aurangzeb said on Saturday.
He emphasized that the government’s long-term strategy focuses on export-led growth, improved tax collection, affordable energy and a stronger role for the private sector.
Addressing a ceremony at a private university, the finance minister said Pakistan’s information technology (IT) exports are projected to reach $5.5 billion during the current fiscal year, while workers’ remittances are expected to rise to $44 billion. He added that foreign exchange reserves are sufficient to cover more than three months of imports.
Pakistan Seeks Sustainable Economic Growth
Aurangzeb said Pakistan needs to move beyond its recurring boom-and-bust economic cycle and establish a growth model that generates employment and improves living standards. He explained that excessive reliance on imports had contributed to balance-of-payments crises in previous years, often requiring four to five years of economic stabilization.
He stressed that higher exports, improved productivity and stronger economic fundamentals are essential to preventing similar crises. According to the minister, Pakistan’s credit rating has improved three times since April last year, reflecting progress in economic management.
The country has also expanded its access to international financial markets through private placements, plans for Panda bond issuance and a €3 billion bond issuance in September. Investor demand for Pakistan’s Eurobonds was reportedly twice the amount offered, with interest coming from Asia, the Middle East, Europe and the United States.
Tax Reforms and Lower Energy Costs
The finance minister said the government is working to broaden the tax base, improve the taxation system and reduce business costs. Measures to support exporters include changes to super tax arrangements, lower tax slabs and financing facilities offering eligible exporters loans at an interest rate of 4.5%.
He added that reducing tariffs and electricity prices would help Pakistani businesses compete in regional markets. The government has also discussed providing additional electricity to industrial consumers at approximately Rs23 per unit.
IT Exports and Remittances Support Foreign Exchange
Aurangzeb said IT services exports have increased from $1 billion to $4.6 billion, with freelancers contributing approximately $1.6 billion. He highlighted the potential of Pakistan’s young workforce to generate foreign exchange and employment through digital services.
Remittances are expected to reach $44 billion despite concerns about regional conflicts affecting overseas workers’ transfers.
Energy Security and Targeted Subsidies
The minister said fuel supplies remained manageable despite regional tensions, with arrangements in place to meet energy requirements through November and preparations underway for winter demand. He emphasized the need for timely gas and liquefied natural gas planning.
He also defended targeted subsidies for motorcycles, three-wheelers and vehicles with engines below 800cc, saying assistance should reach deserving households rather than being distributed through general subsidies.
Population Growth and Economic Challenges
Aurangzeb identified climate change and rapid population growth as major challenges, warning that Pakistan’s annual population growth rate of approximately 2.55% could push its population towards 390 million if the trend continues.
He called for greater investment in women’s education and employment, noting that female workforce participation stands at around 22.7%. He said continued reforms, stronger financial discipline and private-sector participation would be crucial to sustaining economic stability and creating jobs.