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• Says stable rupee, falling inflation and rate cuts underscore economic consolidation
• Population, climate preventing Pakistan from becoming $3tr economy
ISLAMABAD: Finance Minister Muhammad Aurangzeb stated on Wednesday that the country’s foreign exchange reserves are presently sufficient to cover approximately two and a half months of imports, with projections indicating this could increase to three months by the close of the current fiscal year.
The minister came up with the claims after his recent visit to Washington, where he attended the IMF-World Bank Annual Meetings and held extensive discussions with multilateral institutions, global investors, credit rating agencies, and international counterparts. He held a meeting with a delegation of German investors and businessmen led by German Ambassador to Pakistan Ina Lepel.
The minister highlighted that Pakistan continues to consolidate its gains on the macroeconomic stability front. The minister went on to claim that the currency remained stable and inflation is expected to remain within the range of 5 to 7 per cent for the ongoing fiscal year, supported by a downward trend in the policy rate.
An official announcement of the finance ministry said the minister emphasised that Pakistan’s economic stabilisation must be accompanied by deep structural reforms in key areas, including taxation, energy, state-owned enterprises, privatisation, and public finance.
Mr Aurangzeb stated that broadening and deepening the tax base remains a top priority, with the tax-to-GDP ratio targeted to increase from 10.2pc to 11pc this fiscal year, and up to 13pc in the coming years.
On the energy sector, he stressed the government’s commitment to sustainable reform and privatisation aimed at reducing losses and improving recoveries. He mentioned that 34 state-owned enterprises have been handed over to the Privatisation Commission, with significant progress already achieved, including the recent successful acquisition of a state-owned entity by a UAE conglomerate.
The privatisation of Pakistan International Airlines (PIA) is progressing, with four large international conglomerates currently undertaking due diligence, he further said.
The minister highlighted ongoing reforms in public finance, including restructuring of pensions and rationalisation of the federal government’s footprint through closure of some non-performing entities, politically difficult, but fiscally essential steps.
Bond issuance
Mr Aurangzeb also discussed Pakistan’s re-entry into international capital markets, including plans to issue the inaugural Panda Bond in China’s deep capital market and to return to the Eurobond market under the Global Medium-Term Note programme in 2026.
He emphasised that Pakistan’s improving macroeconomic fundamentals, coupled with positive geopolitical developments and renewed engagement with key partners including Europe, China, the United States, and Gulf countries, are creating a favourable environment for foreign direct investment and business-to-business partnerships.
He underscored that Pakistan’s economic progress has been externally validated by three major credit rating agencies including Fitch, S&P, and Moody’s all of which have upgraded the country’s outlook in recent months.
The IMF’s staff-level agreement announced last week, following a comprehensive review mission, further reflects international confidence in Pakistan’s policy direction, he said.
The minister reaffirmed Pakistan’s strong commitment to macroeconomic stability, structural reforms, and investor facilitation. He outlined the government’s steady progress in restoring fiscal and external stability, achieving a stable currency and moderating inflation, and securing renewed confidence from international financial institutions and credit rating agencies.
He emphasised that Pakistan’s economic strategy now rests on deep structural reforms — particularly in taxation, energy, privatisation, and public finance — aimed at building a sustainable and competitive economy.
He invited the German business community to explore the growing opportunities in Pakistan’s key sectors, especially technology, energy, and manufacturing. He appreciated the role of the Pakistan-based AHK German Bilateral Chamber of Commerce in bringing together both established and new German investors to explore Pakistan’s evolving business landscape.
The minister also elaborated on the government’s ongoing initiatives to promote IT exports, facilitate the repatriation of profits and dividends by foreign companies, and strengthen investor confidence in Pakistan’s economic trajectory, added the announcement.
$3 trillion economy
Aurangzeb voiced concerns about unchecked population growth and climate change which are hindering Pakistan from becoming a $3 trillion economy, reported Dawn.com.
Pakistan is home to a vast population of over 251 million, according to World Bank figures. In 2023, the population growth rate was reported to have reached around 2.55pc. However, almost 45pc of Pakistan’s population lives below the poverty line, according to a World Bank report.
At the same time, Pakistan has been ranked as the most vulnerable country to climate change in 2022, according to the Global Climate Risk Index 2025.
“I have been clear right from the beginning that we have two existential issues because if we don’t tackle them correctly … there are two reasons that could derail us from becoming a $3tr economy and those are climate change and population growth,” said the finance minister in an interview on Geo News.
Aurangzeb said the former was no longer merely “an academic discussion” but something “we are living day in and day out”, pointing to the onset of the smog season in Lahore and the recent flood which devastated large tracts of Pakistan.
MNCs exiting Pakistan
Questioned about the recent high-profile departures of multinational companies from the country, the minister said there were multiple aspects to the issue. “These global companies make decisions on their participation regarding which clients to stay with, which products to stay with and in which countries to remain.”
He further said that while some companies were indeed exiting, some entered the market during the past three to four years, pointing to Aramco and others.
There have been a flurry of announcements over the last few years by various multinational corporations either exiting Pakistan or significantly scaling down their operations here. Some of the prominent ones include Procter & Gamble, Shell, Caltex and Eli Lily, among others.
Published in Dawn, October 23rd, 2025
