FINANCE Minister Muhammad Aurangzeb on Monday underscored the country’s strategic shift from aid-based support towards trade- and investment-led engagement with the world, saying that progress on a Free Trade Agreement with the Gulf Cooperation Council was at an “advanced stage”.
In a interview with CNN Business Arabia, Mr Aurangzeb highlighted the vision of PM Shehbaz, which he said reflected the nation’s renewed economic confidence and reform momentum aimed at ensuring long-term sustainability and mutually beneficial partnerships, particularly with GCC countries.
He said that Pakistan has pursued a comprehensive macroeconomic stabilisation program over the past 18 months that has yielded “tangible and measurable results.” He noted that inflation has fallen to single-digit levels after reaching an unprecedented 38per cent.
On the fiscal front, Pakistan has achieved primary surpluses, and the current account deficit remains well within targeted limits, he said.
The finance minister added that the exchange rate has also stabilised, while foreign exchange reserves have improved to cover approximately 2.5 months of imports, reflecting stronger external buffers.
Mr Aurangzeb maintained that two major external validations indicate Pakistan’s improving economic outlook.
“Firstly,” he said, “all three international credit rating agencies have aligned their assessments this year by upgrading Pakistan’s ratings and outlook”.
Secondly, he noted, the country successfully completed the second review under the International Monetary Fund’s Extended Fund Facility, receiving approval from the IMF Executive Board earlier this week.
Such developments, Mr Aurangzeb stated, “demonstrate growing international confidence in Pakistan’s economic management and reform trajectory.”
The finance minister emphasised that macroeconomic stabilisation has been achieved through “a coordinated approach combining disciplined monetary and fiscal policies with an ambitious structural reform agenda”.
“Reforms are being implemented across key areas, including taxation, energy, state-owned enterprises, public financial management, and privatisation, aimed at consolidating stability and laying the foundation for sustainable growth,” Mr Aurangzeb said.
He also highlighted significant progress in improving Pakistan’s tax-to-GDP ratio. “During the last fiscal year, it increased to 10.3 percent, with a clear path towards 11pc,” Aurangzeb said.
He explained that the government’s objective is to reach a level of tax collection that ensures fiscal sustainability.
This, he said, is being pursued by widening the tax base to bring sectors such as real estate, agriculture, and wholesale and retail trade into the formal net, while deepening compliance through production monitoring systems and “AI-enabled technologies”.
The minister detailed efforts in the energy sector to improve governance in power distribution companies, involve private sector expertise, advance privatisation, and reduce the circular debt that has long constrained the sector.
“Rationalising the tariff regime is essential to making energy more competitive for industry, thereby enabling industrial revival and economic growth,” he said.
Mr Aurangzeb acknowledged the longstanding support of GCC countries, including Saudi Arabia, the United Arab Emirates and Qatar, for their critical role in supporting Pakistan through financing and cooperation at international financial institutions.
“This relationship is now evolving towards a new phase centred on trade expansion and investment flows,” he said.
He added that remittances continue to play a vital role, with inflows reaching approximately $38 billion last year and projected to rise to between $41bn and $42bn this year, with over half originating from GCC countries.
Pakistan is now actively engaging with GCC partners to attract investment in priority sectors including energy, oil and gas, minerals and mining, artificial intelligence, digital infrastructure, pharmaceuticals and agriculture, he said.
Expressing optimism regarding progress on an FTA with the GCC, he termed the discussions at an “advanced stage”.
Mr Aurangzeb reiterated the government’s strategic direction in shifting the collective focus on trade rather than relying on aid.
“Pakistan’s future lies in fostering trade and investment partnerships rather than reliance on aid,” said the finance minister.
He emphasised that foreign direct investment is crucial for supporting higher GDP growth, generating employment opportunities and delivering shared economic benefits for Pakistan and its partners.
Published in Dawn, December 16th, 2025