Web Desk

ISLAMABAD: Pakistan&#39;s public debt has fallen by more than Rs1,371 billion ($4.847 billion), the largest quarterly reduction in 69 months. In a post on X (Twitter), the advisor to the country&rsquo;s Finance Minister, Khurram Schehzad, wrote that this was the first quarterly decline in nearly six years, with the last drop occurring in December 2019. <div class="fr-embed"><div class="twitter-tweet twitter-tweet-rendered" style="display: flex; max-width: 550px; width: 100%; margin-top: 10px; margin-bottom: 10px;"><iframe id="twitter-widget-1" scrolling="no" frameborder="0" allowfullscreen="true" style="position: static; visibility: visible; width: 550px; height: 720px; display: block; flex-grow: 1;" title="X Post" src="https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-1&features=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%3D%3D&frame=false&hideCard=false&hideThread=false&id=1990401813116276974&lang=en&origin=https%3A%2F%2Fmain.d1wrm1qseko1cp.amplifyapp.com%2Farticles%2F&sessionId=b93cea67d457c50ae4be591fd9102aada938c5a8&theme=light&widgetsVersion=2615f7e52b7e0%3A1702314776716&width=550px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</iframe></div></div> The decline, from Rs80,518 billion ($284.9 billion) in June 2025 to Rs79,146 billion ($280 billion) in September 2025, represents a 1.7% reduction. The decrease is attributed to the country&rsquo;s strong fiscal management and the strategic early retirement of high-cost debt, which has helped reduce the country&rsquo;s future borrowing requirements and refinancing risks. Schehzad&nbsp;noted that this shift would strengthen Pakistan&rsquo;s medium-term financial stability and provide the government with greater fiscal flexibility moving forward. &ldquo;Lower debt servicing will create fiscal space for priority spending on development, social protection, and growth,&rdquo; the advisor wrote. The drop in debt also signals improving policy credibility and boosted investor confidence, he added.

Banking

This was the first quarterly decline in nearly six years, with the last drop occurring in December 2019.

Pakistan cuts public debt by $4.8 billion in largest 6-year drop

ISLAMABAD: Pakistan&rsquo;s Finance Minister Muhammad Aurangzeb and his economic team outlined a comprehensive set of structural reforms during a press conference on Thursday, aiming to pave the way for sustainable economic growth. The reforms are designed to address long-standing economic challenges and take advantage of both domestic and international opportunities. The government stated it aimed transform the country&rsquo;s economic landscape, with a special focus on improving the taxation system and addressing fiscal and energy sector inefficiencies. Structural reforms The goal of the government&#39;s reform agenda is clear: to ensure Pakistan&#39;s long-term economic stability and avoid the cyclical boom-and-bust scenarios that have plagued the economy in the past. Key to this vision is a series of structural reforms that will address fundamental issues in taxation, energy, state-owned enterprises (SOEs), and government rightsizing. The Finance Minister said that these reforms are already underway and will be institutionalized as part of a &ldquo;whole-of-government&rdquo; approach. He stated that this was not just about planning or discussing what needs to be done, but rather ensuring these reforms were actively implemented and embedded in Pakistan&rsquo;s institutional framework. Leveraging geopolitical opportunities The government is also positioning Pakistan to capitalize on its favorable geopolitical environment. With strong relationships with global economic powers such as China, the United States, and GCC countries, the Finance Minister said it was importance to leverage trade and investment flows to support the nation&rsquo;s growth. Diplomatic and economic engagements, particularly in Washington and Riyadh, are seen as essential to securing funding and long-term partnerships that will benefit Pakistan&rsquo;s economy. Taxation reform One of the key highlights of the press conference was the government&#39;s ambitious plan for taxation reform. FBR Chairman Rashid Mahmood Langrial provided an update on the tax-to-GDP ratio, which saw a 1.49% increase in just one year.&nbsp;The improvement comes on the back of measures introduced in the June 2024 budget and is expected to form the foundation of future fiscal policies. However, the government acknowledged that substantial progress is still needed to reach its long-term target of an 18% tax-to-GDP ratio over the next 3-4 years. This target includes contributions from both federal and provincial governments. The federal government is expected to contribute 15%, including FBR&rsquo;s target of around 13.85%, while the provincial governments are tasked with contributing 3%. &ldquo;The reform of Pakistan&rsquo;s tax system is a long-term commitment. While significant progress has been made, the ultimate goal is to expand and deepen the tax base by broadening the number of tax filers and ensuring the top earners contribute a fair share.&rdquo; The FBR chairman also revealed that the number of tax filers significantly increased this year compared to last year. However, the government remains committed to addressing key criticisms that the tax system is deepening but not broadening. The focus will be on increasing the number of tax filers and ensuring that a broader portion of the population participates in the tax system. Road ahead for FBR The FBR acknowledged challenges in meeting revenue targets, particularly in the months of July to September 2025, where a shortfall of around Rs275 billion was recorded. While the chairman admitted the setback, he reassured that some of the shortfall would be recovered in subsequent months. &ldquo;Reforms within the FBR will be bottom-up, focusing on data-driven strategies and improved compliance. We are rethinking how taxes can be broadened and deepened, and we will ensure that the top 1% of earners pay their fair share,&rdquo; he said. Energy sector reforms The government announced energy sector reforms, including a Rs1,200 billion debt agreement to cut circular debt by Rs700 billion within a year. Power tariffs has been reduced, with industrial users seeing a Rs16 per unit cut. The EV tax also dropped from 71% to 39% to encourage new sectors while maintaining fair taxation. The Competitive Trading Bilateral Contract Market (CTBCM) is set to launch by early 2026 to improve electricity trading and reduce reliance on government power purchases. Energy Minister Awais Leghari said these steps aim to lower costs, improve service, and make the sector more sustainable. Privatization and SOE reforms The government is also focusing on the privatization and restructuring of state-owned enterprises (SOEs). Privatization Advisor discussed the ongoing sales of banks and the planned privatization of PIA and DISCOs. Meanwhile, Prime Minister&rsquo;s Coordinator for Rightsizing announced that 20 ministries have been restructured, 54,000 vacant positions abolished, and loss-making entities like PASSCO shut down to ease the fiscal burden. The broader vision The government&rsquo;s reform agenda includes&nbsp;addressing taxation, energy, debt management, SOE restructuring, rightsizing of government institutions, pension reforms, and digital transformation. The reforms are aimed at ensuring sustainable economic growth and addressing the challenges of macroeconomic instability. &ldquo;The goal is to create a system where all sectors of the economy are working together towards a single vision of sustainable growth. This isn&rsquo;t about isolated changes &mdash; it&rsquo;s about making structural adjustments that will last for decades,&rdquo; the finance minister said.

Economy

The government’s reform agenda includes addressing taxation, energy, debt management, SOE restructuring, rightsizing of government institutions, pension reforms, and digital transformation.

Pakistan sets ambitious 18% tax-to-GDP target to stabilize economy

Faraz Saeed

LAHORE: For years, Pakistan&rsquo;s economy has often been discussed through broad narratives of crisis and decline. But analysts say that much of this discourse overlooks the actual data, which now points to a phase of stabilization and gradual recovery under severe external and climate-related pressures. The contrast between perception and performance, they argue, has rarely been more pronounced. The comparison with India frequently dominates headlines. India&rsquo;s growth rate, hovering near 7%, is widely showcased as a regional success story. Yet, as economists note, growth alone does not define economic well-being. India currently ranks 105th on the Global Hunger Index 2024, categorized in the &ldquo;serious&rdquo; hunger bracket, with more than 800 million people reliant on free food rations. Meanwhile, the richest 1% own 40% of national wealth, leaving the bottom half with just 6.4%. Economic expansion has not prevented inequality from reaching levels deeper than the colonial era. Pakistan, by contrast, has weathered multiple overlapping crises: record flooding in 2022 displaced 33 million people and caused more than $30 billion in losses; new floods in 2025 again hit Punjab, damaging crops and supply chains just as stabilization had begun. These shocks came amid global inflation, volatile energy markets, and disruptions at the Afghan border. Despite this, the economy held together. A data-based correction to recent pessimistic commentary came from Khurram Schehzad, advisor to the finance minister, after BBC Urdu&rsquo;s recent report painted a bleak picture of Pakistan&rsquo;s economic trajectory. In a detailed post on X, Schehzad challenged the narrative with updated performance metrics. He noted that GDP growth rose from 2.5% in FY24 to 3.0% in FY25, with projections of 3.6&ndash;4.0% in FY26. Per capita income climbed to $1,830, the first significant increase in years. Inflation fell sharply, from 23% to 4.5%, its lowest in nine years, while the policy rate dropped from 22% to 11%, reopening avenues for investment and credit. The external account improved in parallel. Pakistan recorded its first current account surplus in 14 years, reaching $2.1 billion in FY25. Foreign exchange reserves rose to $14.5 billion, about 55% higher than a year earlier. The primary fiscal surplus reached a record 2.4% of GDP. The overall deficit hit a nine-year low. Debt metrics also improved. Debt-to-GDP declined from 75% to under 70%, and the government posted a fiscal surplus of Rs1.5 trillion (&asymp; $5.34 billion) in the first quarter of FY26. Ratings agencies responded in kind: Fitch upgraded Pakistan to B&ndash; (April 2025) S&amp;P matched the upgrade (July 2025) Moody&rsquo;s raised Pakistan to Caa1 (August 2025) Each cited strengthened reserves, improved fiscal discipline, and credible reforms. These reforms are wide-ranging. The tax system has shifted to digital e-invoicing, provinces have begun agriculture income tax enforcement, and the energy sector is being restructured through tariff rationalization and governance changes. Industrial and agricultural tariffs have been brought down from Rs38 to Rs23 per unit, with three-year price certainty, reducing production costs. Privatization, stalled for years, has resumed: the First Women Bank was recently acquired by a UAE investment group. Under the Medium-Term Debt Strategy, Pakistan has already repaid Rs3.5 trillion (&asymp; $12.45 billion) in early debt retirements. Regulatory simplification has reduced compliance costs by over Rs300 billion (&asymp; $1.07 billion) annually. This shift is reflected in trade and markets. Exports grew across goods (+7%), services (+15%), and technology (+18%) in FY25. Large-scale manufacturing expanded 9% between July and September 2025. The Pakistan Stock Exchange surged 60% in FY25, with its investor base growing 28%, surpassing one million individual investors. The ICT and freelance economy now leads the transformation. Between July&ndash;September FY26, ICT exports reached $1.06 billion (+20.5% YoY); September alone recorded $366 million (+25.3%), the highest month ever. ICT now contributes 48% of total services exports, generating a $953 million trade surplus. This progress has attracted renewed foreign investment. Saudi Arabia has advanced commitments in refining and minerals, China&rsquo;s CPEC 2.0 has brought $1.5 billion in new B2B projects, and the UAE and US have expanded investment in banking, renewables, ports, mining, and digital infrastructure. The picture that emerges is not one of triumph, but of resilience combined with gradual structural repair. Inflation is down. Interest rates are down. Reserves are higher. Fiscal and external accounts are in surplus. Exports and ICT earnings are at record levels. Investment appetite is returning. Structural reforms, long delayed, are underway. Global headlines may continue to frame Pakistan&rsquo;s economy as collapsing. But the data shows an economy that is stabilizing, reforming, and quietly rebuilding, under extraordinary constraints. The story, as the numbers tell it, is not one of decline, but of recovery under pressure, real, uneven, but unmistakably underway.

Pakistan’s economy is showing signs of stabilization, with lower inflation, rising reserves, export growth and structural reforms underway, despite recent climate shocks and external pressures, according to officials and analysts citing updated macroeconomic data.

Behind headlines: Pakistan’s economy shows stabilization amid crises, reform

Maham Khan

ISLAMABAD:&nbsp;At first glance, it feels almost anachronistic&mdash;two countries announcing a barter agreement in the third decade of the 21st century, in a world hurtling towards a cashless economy. Yet, this is precisely the economic route countries like Pakistan, Iran, and Russia seem to be charting in 2025. On Sunday, Pakistan and Iran formally signed an amended Business-to-Business (B2B) Barter Trade Mechanism, first introduced in 2023, aimed at boosting bilateral trade between the two sanction-hit economies. The news was confirmed by Pakistan&#39;s Ambassador in Tehran, Muhammad Mudassir Tipu. According to Tipu, the revised statutory regulatory order (SRO) followed &ldquo;an exhaustive process of deliberations,&rdquo; and addressed longstanding concerns of the business communities in both countries. He expressed optimism that the framework would &quot;substantially elevate Pakistan-Iran trade and diversify its base.&quot; Business bodies and chambers of commerce were encouraged to circulate the SRO among their members to enable them to capitalize on what he termed &ldquo;mutually-beneficial trade dividends.&rdquo; This development follows another high-profile barter deals. In October 2024, Pakistan signed a barter deal with Russia in Moscow. According to Pakistan&rsquo;s Special Investment Facilitation Council (SIFC), the agreement involved Russian firms and Pakistani companies exchanging agricultural commodities such as chickpeas, rice, mandarins, potatoes, and lentils. The deals were sealed during the first-ever Pakistan-Russia Trade and Investment Forum, with over 60 Pakistani firms showcasing goods and services with a combined export value exceeding $500 million. The forum also featured high-ranking Russian officials and banks, who expressed an interest in alternative payment mechanisms given the continuing SWIFT sanctions on Russia. Why barter? Why now? The resurrection of barter as a tool of statecraft and economic survival has not gone unnoticed. Once relegated to history books, barter has made a curious comeback. To be clear: this isn&rsquo;t romantic nostalgia for ancient trade routes or a step toward alternative economic utopias. Rather, it is a direct response to modern geopolitical and financial constraints, especially in economies heavily burdened by sanctions, currency volatility, and restricted access to global banking infrastructure. According to economist Dr Ikramul Haq, barter offers developing countries like Pakistan a strategic lifeline in a world where Western-dominated financial institutions and reserve currencies&mdash;primarily the US dollar&mdash;remain gatekeepers of international trade. For nations under sanctions such as Iran and Russia, barter becomes less of an option and more of a necessity. &ldquo;The bartering system helps to end dependence on keeping foreign exchange reserves and mitigate fluctuations,&rdquo; Dr Haq explained. &ldquo;In case of Iran and Russia, the additional reason is sanctions on banks imposed by the US and other states.&rdquo; This also explains why Dr Haq advocates for Pakistan to expand such mechanisms to all &quot;Golden Ring&quot; countries&mdash;a term sometimes used to refer to the emerging bloc of Russia, China, Iran, Turkey, and Pakistan. Iran: A crisis economy Iran&rsquo;s embrace of barter is less a strategic pivot than an act of economic survival. Its 2025 macroeconomic outlook is, by most accounts, grim. According to the World Bank, Iran is projected to experience a 1.7% contraction in GDP this year, with the Iranian Parliament&#39;s own research center forecasting -0.3% growth in the first half alone. This is compounded by inflation, with the International Monetary Fund (IMF) projecting a 43.3% inflation rate for 2025, up from 32.6% in 2024. Sanctions are at the heart of Iran&rsquo;s economic woes.&nbsp;Renewed UN sanctions, reinstated in September 2025, have severely impacted the country&rsquo;s oil revenue and foreign exchange reserves. The 12-day war with Israel only accelerated inflationary expectations and currency depreciation. Meanwhile, Iran&rsquo;s currency&nbsp;is in free fall. While officially pegged at 42,000 IRR per USD, the free-market rate is substantially worse. In the most pessimistic&mdash;but widely accepted&mdash;scenario outlined by the Iranian Chamber of Commerce, inflation could hit 90% and the exchange rate could reach 165,000 tomans (equivalent to 1.65 million rials) per dollar by the end of the year. Poverty is escalating just as quickly. The World Bank estimates that 32.7 million Iranians, out of a population of 86 million, now live on less than $8.30/day, the international poverty threshold. Despite a life expectancy of 77.7 years, Iran&rsquo;s per capita GDP stands at $5,528.9, with total GDP at $475.3 billion (in 2024). Against this backdrop, barter offers Tehran a path&mdash;however limited&mdash;to bypass the dollarized international system and maintain trade flows without exhausting its dwindling reserves and navigating sanctioned banking channels. Russia: Sanctioned but still trading The Russian economy, though more resilient than Iran&rsquo;s, is also being dragged toward alternative trade arrangements by necessity. Following years of Western sanctions over the war in Ukraine, Russia&#39;s access to the global banking system remains severely constrained. The IMF&rsquo;s 2025 report revised Russia&rsquo;s GDP growth forecast to 0.6%, down sharply from 4.3% in 2024. While not collapsing, the Russian economy is clearly losing steam. Several factors are contributing to this slowdown: 1. &nbsp; &nbsp;High interest rates imposed by the Central Bank to curb inflation 2. &nbsp; &nbsp;Reduced oil revenues due to global price volatility and export limits 3. &nbsp; &nbsp;Dwindling fiscal reserves, which had previously cushioned the impact of sanctions Inflation remains persistent, projected at 9% in 2025&mdash;more than double the global average. Meanwhile, the ruble, which has seen periods of extreme volatility, is currently trading at around 81 per USD. Some analysts predict a gradual devaluation, with one Central Bank survey expecting it to average 102 per USD before year&rsquo;s end. Still, Russia has adapted in typical Kremlin fashion&mdash;by building elaborate sanctions evasion networks and deepening ties with countries willing to trade outside the dollar-based system. India, the UAE, and China continue to do business with Moscow, albeit with their own forms of risk mitigation. For Pakistan, therefore, entering a barter arrangement with Russia isn&#39;t just symbolic&mdash;it&rsquo;s practical. It offers access to agricultural exports, manufacturing goods, and even energy commodities, without dealing with SWIFT-related complications. Is barter a long-term economic model? Barter is not without its critics. Most mainstream economists and leading financial institutes&mdash;including Merwan Engineer, Shouyong Shi and even David Graeber&mdash;consider it inefficient or inherently limited. Without a standard medium of exchange, trade requires perfect bilateral balance&mdash;something rare in complex global supply chains. There are also logistical challenges: matching needs, coordinating delivery timelines, and ensuring equivalency in value. However, in sanction-heavy geo-economic environments, these inefficiencies are often deemed a worthwhile price to pay for strategic autonomy. As Dr Haq noted, barter arrangements allow developing economies to maintain trade relationships, conserve foreign reserves, and resist dependency on Western financial systems. That said, barter alone is not a remedy. For it to function as a sustainable supplement&mdash;not just a sanction workaround&mdash;countries must build legal frameworks, logistics networks, and valuation protocols. The involvement of chambers of commerce, as seen in the Pakistan-Iran SRO, is a step in that direction. But the elephant in the room remains: is this a temporary adaptation, or a signal of a deeper shift in the global economic order? Beyond barter Some experts see the return of barter not as nostalgia, but as a prelude to a new parallel financial system&mdash;a multipolar world where dollar hegemony is diluted by yuan, and local currencies backed by commodity exchange or digital tokens. Efforts like Russia&rsquo;s Mir payment system, China&rsquo;s digital yuan, and bilateral clearing mechanisms between BRICS nations indicate that barter may be a stepping stone toward broader de-dollarization efforts. If so, Pakistan, Iran, and Russia are early adopters of a model born not of economic idealism but of necessity&mdash;required due to sanctions, resource constraints, and diplomatic isolation. Final thoughts Barter, once dismissed as archaic, now occupies an unlikely position in the toolbox of 21st-century economic diplomacy. While unlikely to replace modern financial systems, it offers a stopgap&mdash;and in some cases, a strategy&mdash;for nations navigating a world of geopolitical fragmentation and asymmetric economic power.

People barter goods in San Miguel market, on the outskirts of Buenos Aires, Argentina. (REUTERS)

Business

Developing nations like Pakistan, Iran, and Russia are reviving barter trade as a strategic workaround to bypass dollar dependence, financial sanctions, and restricted global banking access.


In the age of digital trade, why are developing countries turning to barter?

Gaitty Ara Anis

WASHINGTON, DC: Pakistan&rsquo;s mining sector is poised for major expansion, with Finance Minister Muhammad Aurangzeb projecting that the first year of commercial operations at the Reko Diq copper and gold project could generate $2.8 billion in copper exports, a 10% increase in the country&rsquo;s overall export base.&nbsp;Speaking exclusively to Pakistan TV Digital&nbsp;at the conclusion of his weeklong US visit for the IMF-World Bank Annual Meetings in Washington, Aurangzeb said the project is only the beginning, with additional mines and concessions expected to come online in the coming years.&nbsp;&ldquo;This is just the start because there are other mines and concessions coming through,&rdquo; he said.&nbsp;Aurangzeb highlighted that the Reko Diq project is attracting US investment, with the International Finance Corporation (IFC) leading the syndication and the US EXIM Bank expected to participate once the US government shutdown concludes.&nbsp;Islamabad&rsquo;s long-term vision includes smelting and value addition, which will enhance Pakistan&rsquo;s industrial output. &ldquo;That&rsquo;s not going to happen overnight, but where we are headed has huge upside for Pakistan,&rdquo; he said.&nbsp;Yuan bonds: diversifying Pakistan&rsquo;s fundingAlongside mining, Pakistan plans to issue its first-ever yuan-denominated bonds worth $250 million by the end of 2025, part of a strategy to diversify funding sources and strengthen macroeconomic resilience.&nbsp;&ldquo;From our perspective, this is a very important trade, a funding diversification discussion,&rdquo; Aurangzeb said. &ldquo;We have previously done Euro issuances and US dollar Islamic support, so we have been late, quite frankly, in terms of tapping the second-largest and second-deepest capital market in the world.&rdquo;&nbsp;He said the government will raise about $250 million equivalent in Chinese yuan (RMB) in the first phase and called the move &ldquo;long overdue&rdquo; to strengthen ties with Asian markets and reduce reliance on Western financial channels.&nbsp;Aurangzeb confirmed that the issuance will feature credit enhancement from the Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB).&nbsp;&ldquo;We are following the Egyptian model because they had credit enhancement so that we will have the same from AIIB and ADB,&rdquo; he explained.&nbsp;Two non-deal roadshows have already generated &ldquo;strong investor interest,&rdquo; and the minister said the issuance is expected to be completed before the end of the calendar year, supported by &ldquo;very strong underwriters.&rdquo;&nbsp;Macroeconomic stability and reform commitment&nbsp;Aurangzeb said the bond issuance is part of a broader strategy to consolidate macroeconomic stability, which has shown notable improvements.&nbsp;&ldquo;If we look at it holistically, around macroeconomic stability, a stable currency, FX reserves, inflation coming into single digits, and the policy rate coming down. We are making progress that now has two external validations,&rdquo; he said.&nbsp;He cited the IMF staff-level agreement and upgrades from all three major credit rating agencies as indicators that Pakistan&rsquo;s reform direction is recognized internationally.&nbsp;&ldquo;That too has happened after the test of two and a half to three years,&rdquo; he added.&nbsp;Aurangzeb stressed that the government is focused on long-term sustainability, emphasizing reforms in taxation, energy, state-owned enterprises, and public finances.&nbsp;&ldquo;That is what is going to give permanence, because oil prices can go up and down,&rdquo; he said.&nbsp;Privatization drive&nbsp;On privatization, Aurangzeb acknowledged past delays but emphasized that progress is now decisive.&nbsp;&ldquo;This is one area where we haven&rsquo;t done well in the last 18 months,&rdquo; he said. &ldquo;But we are beginning to move in that direction.&rdquo;&nbsp;The first privatization in this cycle was the sale of a small public-sector bank to a UAE-based conglomerate.&nbsp;&ldquo;It&rsquo;s a step in the right direction. They have big plans in terms of investment flows and maybe even going digital with that institution,&rdquo; he said.&nbsp;Describing the transaction as the &ldquo;first run on the board,&rdquo; Aurangzeb said it demonstrates the government&rsquo;s commitment to structural reform.&nbsp;The Pakistan International Airlines (PIA) privatization is also advancing.&nbsp;&ldquo;Last year we weren&rsquo;t successful, but this year, with the reopening of flight routes to Europe in January and to the UK recently, the airline&rsquo;s value proposition has improved,&rdquo; he said.&nbsp;A shortlist of qualified bidders has been finalized, and due diligence is ongoing.&nbsp;&ldquo;I&rsquo;m quite sanguine that before the year is out, this is going to go through,&rdquo; he added.&nbsp;The minister also mentioned finalizing a sell-side advisor for the Roosevelt Hotel transaction in New York. Additionally, three power distribution companies (DISCOs) are in Phase One of privatization, with international advisors Albert Alers and Marcelis leading the process.&nbsp;&ldquo;We have good traction there as well,&rdquo; he said, noting that 24 state-owned enterprises have been handed over to the Privatization Commission. &ldquo;The first one is the first drop,&rdquo; he added, echoing Prime Minister Shehbaz Sharif&rsquo;s remarks.&nbsp;Building economic resilience&nbsp;Aurangzeb emphasized the importance of fiscal and external buffers to manage global economic cycles.&nbsp;&ldquo;At some point, these cycles will reverse. Commodities go through cycles, and countries go through cycles. Countries that do well are those that build buffers, fiscal and external, and let the private sector lead growth,&rdquo; he said.&nbsp;He added that with renewed investor confidence, structural reforms, and diversified funding, Pakistan is now positioned to convert early recovery signs into long-term sustainable stability.&nbsp;&ldquo;The direction of travel is clear. We are turning the first drops of progress into a steady stream of sustainable reform,&rdquo; Aurangzeb concluded.

Pakistan finance minister Muhammad Aurangzeb

In a wide-ranging interview with Pakistan TV Digital, Finance Minister Muhammad Aurangzeb says Pakistan will generate $2.8 billion in copper exports, issue $250 million yuan bonds, and advance privatizations.

Pakistan’s Reko Diq copper project to generate $2.8B in first-year: finance minister

WASHINGTON: Pakistan&#39;s Finance Minister Muhammad Aurangzeb on Thursday said that his country&nbsp;was making a deliberate shift towards export led growth driven by the private sector, aiming to end the reliance on consumption and import-fueled boom-bust cycles. While speaking to a panel at the Atlantic Council &mdash; a DC based think-tank focused on international affairs &mdash; during his visit to the US, the finance minister said that the government had adopted the bold National Tariff Policy (NTP) to enable the plans.&nbsp; Aurangzeb also provided an overview of the country&#39;s economic trajectory, structural reforms, and the immediate challenges posed by climate change, adding that the shift in the policy reflected an &quot;East Asia view&quot; of economic growth, aiming to significantly reduce custom duties, additional custom duties, and regulatory duties over the next few years.&nbsp; The finance minister said that the focus was on making raw materials and intermediate goods cheaper to boost the competitiveness of exporters.&nbsp; He said that while textiles remain the core export sector, IT services were set to play a crucial role.&nbsp; &ldquo;A major upcoming boost is the Reko Diq project, which is expected to inject approximately $2.8 billion in exports in its first year, representing about 10% of the current export base,&rdquo; he said. The finance minister said that the early signs of success included the auto industry starting to finally export.&nbsp; He said that the strategy to enable private-sector growth also involves tackling energy issues, specifically by addressing power sector circular debt and handing over distribution companies to the privatization side. Pakistan reached a Staff Level Agreement with the International Monetary Fund that has completed the second review of its loan program, allowing the country to access $1.2 billion after approval from the fund&#39;s board. The IMF will provide Pakistan $1 billion under its Extended Fund Facility and $200 million under its Resilience and Sustainability Facility, bringing total disbursements under the two arrangements to about $3.3 billion. While talking about managing the macroeconomic stability front &mdash; something the minister talked about on Wednesday during a meeting with the IMF managing director &mdash; the minister noted that Pakistan was on the right direction in this regard.&nbsp; The progress received significant external validation, including the successful completion of the IMF program reviews (EFF and RSF) and, importantly, the alignment and upgrading of Pakistan&#39;s credit ratings by all three major agencies: Fitch, S&amp;P, and Moody&#39;s. The minister agreed that a major element of the stability effort was addressing the nation&rsquo;s largest fiscal burden &mdash; &lsquo;debt servicing.&rsquo;&nbsp; To tackle the single biggest expense for the government, the ministry was employing liability management trades and buying back domestic debt.&nbsp; While responding to a question, the finance minister termed the recent decline in the policy rate a help in reducing the overall volume of debt service.&nbsp; He added that the government is preparing to initiate politically sensitive discussions around the National Finance Commission (NFC) award to reform the revenue-sharing arrangement between the Federation and the provinces.&nbsp; The current setup leaves the Federation with little fiscal liberty after debt servicing, and the minister stressed that it needed to be addressed for the system to remain sustainable. &ldquo;The path to long-term sustainability is anchored in aggressive tax reform. The ministry&rsquo;s commitment is clear, to raise the tax-to-revenue ratio from the previous year&rsquo;s 10.2% to 11% by the end of the current fiscal year, and ultimately to 13% under the IMF program,&rdquo; he said.&nbsp; On how to broaden the tax base in Pakistan, he said that it would be achieved through a two-pronged strategy of broadening and deepening the tax base.&nbsp; Broadening efforts included legislating an agriculture income tax at the provincial level and moving to bring the retail, wholesale, and real estate sectors into the net.&nbsp; Deepening relies heavily on technology, utilizing data analytics and artificial intelligence for digital monitoring and invoicing to curb tax leakages in key sectors like cement, sugar, tobacco, and beverages. The minister termed climate change as one of the two existential threats facing Pakistan &mdash; alongside population growth. Following this year&#39;s flooding, the government opted to use its resources and existing fiscal space for rescue and relief given that the intensity and frequency of devastating floods were on the rise.&nbsp; Due to damage, particularly in the rice and cotton crops, country&rsquo;s GDP growth projection will be shaved down from over 4% but is still expected to land north of 3% for the year. Finance Minister&nbsp;vows deeper economic partnership Saudi ArabiaEarlier in the day, the finance minister reaffirmed Pakistan&#39;s commitment to fostering a deeper economic partnership with Saudi Arabia. During a meeting with Saudi Finance Minister Mohammed Aljadaan on the sidelines of the IMF&ndash;World Bank Annual Meetings in Washington DC, Aurangzeb sought Saudi support for infrastructure development projects with both sides reviewing the growing trade and investment relations. According to Radio Pakistan, he apprised his Saudi counterpart of the ongoing privatization process of Pakistan International Airlines (PIA) and key airports, underscoring the government&rsquo;s resolve to attract strategic investments through transparency and efficiency. The two ministers agreed that institutions such as the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) could play a vital role in mobilizing and de-risking private sector investments in Pakistan. During a meeting with CEO of the US International Development Finance Corporation in Washington DC, Aurangzeb highlighted significant investment opportunities with Pakistan&#39;s oil and gas, mines and minerals, agriculture, IT and pharmaceutical sectors. Finance Minister underscored the consensus at the leadership level to enhance trade and investment ties, welcoming DFC&#39;s interest in facilitating private sector-led funding for projects in Pakistan.

Aiming to end country’s historical reliance on consumption, import-fueled boom-bust cycles.

Pakistan finance minister says focus on export led growth

ISLAMABAD: Pakistan has reaffirmed its vision to position Information Technology (IT) as a key driver of economic growth, setting ambitious export and investment targets and pursuing partnerships with emerging digital markets worldwide. The Pakistan Mission to the United Arab Emirates (UAE), in collaboration with the Ministry of Information Technology and Telecommunication, the Pakistan Software Export Board (PSEB), and the Trade Development Authority of Pakistan (TDAP), hosted a high-profile networking event titled &ldquo;Pakistan Night&rdquo; to promote Pakistan&rsquo;s digital potential and attract international investors. IT and Telecommunication Minister Shaza Fatima Khawaja, who served as the chief guest, reaffirmed the government&rsquo;s &ldquo;strong commitment to supporting the IT industry in key areas such as artificial intelligence, cybersecurity, software development, and data processing.&rdquo;&nbsp; She highlighted the success of programs like Ignite, which have enabled Pakistani startups to connect with global opportunities. &ldquo;Pakistan&rsquo;s digital economy is expanding rapidly, and we are committed to building an ecosystem that fosters innovation and international collaboration,&rdquo; the minister said. Pakistan&rsquo;s Ambassador to the UAE Faisal Niaz Tirmizi said the government aims to increase IT exports from the current $4 billion to $100 billion, driven by innovation, foreign investment, and strategic partnerships. &ldquo;Pakistan has immense digital potential and a growing base of skilled professionals. By engaging with emerging IT markets, we can transform this potential into global competitiveness,&rdquo; Tirmizi said. The event brought together senior diplomats, Emirati officials, and representatives from the Dubai Chamber of Commerce, business councils, and GITEX Global 2025 exhibitors. Rana Ihsan Afzal Khan, coordinator to the prime minister on commerce, described Pakistan&rsquo;s IT sector as &ldquo;the fastest-growing industry in the country,&rdquo; noting an average annual growth rate of around 20%. According to official data, Pakistan&rsquo;s IT sector currently contributes nearly 1% to national GDP, employs over 120,000 professionals, and comprises more than 12,000 companies. The sector has doubled in size over the past four years, with IT exports reaching $1.53 billion in the first five months of the current fiscal year. A 33% increase from the previous year. The government&rsquo;s broader digital strategy includes the &ldquo;Uraan Pakistan&rdquo; initiative, targeting $10 billion in IT exports by 2029, and a $10 billion partnership with South Korea to develop technology parks across the country. &ldquo;These initiatives are not just policy goals, they represent a roadmap to Pakistan&rsquo;s digital future,&rdquo; Khawaja said, lauding the efforts of Pakistan&rsquo;s diplomatic missions and industry leaders in promoting innovation-led growth.

In Dubai, Islamabad showcases its growing IT potential at the “Pakistan Night” event, where officials outlined plans to boost exports to $100 billion through innovation, global partnerships, and major investments in technology infrastructure.

Pakistan eyes $100 billion in IT exports through global partnerships

LAHORE: Pakistan&rsquo;s latest negotiations with the International Monetary Fund (IMF) ended on Wednesday without a staff-level agreement (SLA), briefly delaying the release of around $1.25 billion in loan tranches. Despite the setback, both sides reported &ldquo;significant progress,&rdquo; fueling expectations that a deal will be reached within weeks. The IMF mission concluded its 11-day visit under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), totaling $8.4 billion. The discussions covered the second EFF review and the first RSF review. While no SLA was finalized, statements from Islamabad and the IMF indicated a constructive tone, suggesting that remaining technical issues will soon be resolved. According to officials involved, the IMF has sought higher provincial budget surpluses and a downward revision of the Federal Board of Revenue&rsquo;s (FBR) annual collection target, factoring in the economic impact of recent floods. Punjab is expected to contribute Rs740 billion [$2.64 billion] to the surplus, followed by Sindh, Rs370 billion [$1.32 billion], Khyber Pakhtunkhwa, Rs220 billion [$0.79 billion], and Balochistan, Rs185 billion [$0.66 billion]. The Fund has also requested verified estimates of flood-related losses and assurances that provincial governments can absorb recovery costs without breaching fiscal targets. Notably, the IMF mission did not hold a formal wrap-up meeting with Finance Minister Muhammad Aurangzeb, an unusual, though not unprecedented, indication that talks have entered a sensitive technical phase. The visiting team, led by Mission Chief Iva Petrova, did not issue its customary end-of-mission statement, and the IMF&rsquo;s local office declined to comment. The next round of discussions is expected during the IMF-World Bank Annual Meetings in Washington, where Minister Aurangzeb will lead Pakistan&rsquo;s delegation. Market analysts remain cautiously optimistic. &ldquo;The IMF mission&rsquo;s acknowledgment of significant progress is encouraging,&rdquo; Waqas Ghani, head of research at JS Global, told Pakistan TV Digital. &ldquo;The Fund appears to be seeking stronger, time-bound commitments before finalizing the staff-level agreement. In previous reviews, the SLA often followed a few weeks after the mission&rsquo;s conclusion.&rdquo; Economist Dr. Ikram ul Haq shared a similar view but pointed to underlying structural weaknesses. &ldquo;The staff-level agreement will happen; it&rsquo;s only a matter of time,&rdquo; he said. &ldquo;However, the IMF has flagged discrepancies in trade data amounting to billions of dollars. Pakistan must address under-invoicing, rationalize tariffs, and broaden the tax base, including taxing agricultural income of absentee landowners.&rdquo; The IMF later released a brief statement confirming &ldquo;significant progress&rdquo; toward reaching an SLA on the second EFF review and first RSF review, noting that &ldquo;program implementation remains strong and broadly aligned with the authorities&rsquo; commitments.&rdquo; In parallel, the government notified draft amendments to the Sharing of Assets of Civil Servants Rules, 2023, requiring Grade 17 and above officers to submit electronic declarations of assets and income through the FBR. While armed forces personnel remain exempt, banks must establish secure data channels, part of broader governance reforms under IMF conditionalities. With most macroeconomic targets reportedly met, the remaining gaps appear procedural. Officials expect the SLA to be finalized within weeks, paving the way for IMF board approval and disbursement by late November or early December. For Pakistan, the stakes are high: securing the $1.25 billion tranche would ease external financing pressures, stabilize the rupee, and strengthen market confidence ahead of a politically sensitive budget season. As the IMF team departs and technical work continues virtually, the real challenge for Pakistan lies not just in signing the deal &mdash; but in sustaining the reforms once the funds begin to flow.

Analysts say the IMF’s acknowledgment of “significant progress” reflects confidence in Pakistan’s reform efforts, predicting a staff-level agreement within weeks that could unlock $1.25 billion and bolster market stability ahead of the next budget.

IMF, Pakistan close to staff-level agreement after constructive talks

ISLAMABAD:&nbsp;<span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Prime Minister Shehbaz Sharif termed his meeting with President Donald Trump in Washington, DC, as highly constructive and productive for strengthening the bilateral relationship between Pakistan and the US.&nbsp; &nbsp; &nbsp;&nbsp; <span style="font-size: 18px; font-family: Arial, Helvetica, sans-serif; color: rgb(0, 0, 0); background-color: transparent; font-weight: 400; font-style: normal; font-variant: normal; text-decoration: none; vertical-align: baseline; white-space: pre-wrap;">Speaking to UK-based Pakistani journalists in London, he said that the US President has assured him of advancing bilateral economic cooperation, appreciating President Trump&#39;s important role in the Pakistan-India ceasefire. On Sunday, according to a statement issued by the Prime Minister&#39;s Office, the premier said his recent meeting with US President Donald Trump in Washington was &ldquo;very useful&rdquo; and signaled improving Pakistan-US relations.&nbsp;Speaking yesterday, Sharif praised the diaspora as a &ldquo;valuable asset&rdquo; and a source of &ldquo;honor&rdquo; for the nation.&nbsp; He credited them for contributing to Pakistan&rsquo;s economic recovery, saying the economy was stabilizing after serious challenges faced two to three years ago. &ldquo;Our economy is moving in the right direction because of joint efforts. Economic stability is the result of excellent teamwork,&rdquo; Sharif said.&nbsp;The prime minister also highlighted progress on the military and diplomatic fronts. &ldquo;Pakistan has achieved great progress on military, economic, and diplomatic fronts. The country is moving forward externally, militarily, and economically,&rdquo; he said. &ldquo;Pakistan&rsquo;s honor and dignity have increased.&rdquo;&nbsp; &ldquo;We won the war and defeated the enemy.&rdquo;&nbsp;On Gaza, the prime minister decried unprecedented suffering, saying more than 64,000 Palestinians had been killed. &ldquo;This oppression must end and peace should come soon,&rdquo; he said, while welcoming engagement on the issue during meetings between Muslim and Arab leaders and Trump on the sidelines of the UNGA summit.&nbsp;The PMO stated that Sharif&rsquo;s remarks underscored his government&rsquo;s commitment to strengthening international partnerships, supporting overseas communities, and promoting peace and stability in the region.

Foreign Affairs

Calls meeting with the US president 'very useful,' crediting overseas Pakistanis for economic progress and stressing Pakistan’s achievements on diplomacy, security, and its stance on Gaza and Kashmir.

Articles tagged with "pakistan economy"