Finance Minister Says Pakistan Targets 3% Growth Amid Fiscal ReformsFinance Minister Says Pakistan Targets 3% Growth Amid Fiscal Reforms
Finance Minister Senator Muhammad Aurangzeb has said that Pakistan is targeting economic growth above 3 percent for FY2025 despite the twin challenges of climate change and population pressure.
He said the government is pushing ahead with its reform agenda to strengthen fiscal stability and attract private investment.
Speaking at The Atlantic Council in Washington D.C., Aurangzeb detailed the government’s reform strategy during a session titled “Reform Efforts in Pakistan and the Challenges Ahead.”
The event was hosted by Fred Kempe, President and CEO of The Atlantic Council, and moderated by Dr. Aasim M. Husain, former IMF official and author of the report “Rescuing Pakistan’s Economy.”
Dr. Husain congratulated the minister on the completion of the first year under the IMF-supported program and the recent staff-level agreement that paved the way for a new disbursement to Pakistan.
Aurangzeb said the government had “consolidated macroeconomic stability” over the past year, citing validation from the IMF and international rating agencies. He credited disciplined fiscal management for improving investor confidence, narrowing sovereign spreads, and achieving Pakistan’s first current account surplus in 14 years.
The minister said that Pakistan chose to fund post-flood relief and reconstruction from domestic resources, rather than external appeals — a move he described as a sign of stronger fiscal capacity. A 300-day national plan has been launched to rebuild damaged infrastructure and strengthen climate resilience.
Discussing fiscal reforms, Aurangzeb highlighted efforts to broaden the tax base by bringing agriculture, retail, and real estate sectors into the net, improving compliance through AI-driven data analytics, and reducing leakages in sales tax collection. The government, he said, aims to raise the tax-to-GDP ratio from 10.2% to 11% this year, and to 13% in the medium term.
He also referred to the National Fiscal Pact with provincial governments, which lays the groundwork for a new NFC Award. The first meeting of the NFC is expected in early November after delays caused by the floods.
On the growth outlook, the finance minister reiterated that Pakistan is shifting toward a private-sector-led, export-driven model. The new National Tariff Policy aims to reduce import dependence by lowering duties on raw materials and intermediate goods. He pointed to IT, mineral exports, and Reko Diq as key future growth drivers.
Aurangzeb reaffirmed Pakistan’s commitment to a market-based exchange rate and prudent monetary policy under the State Bank’s supervision, stressing that productivity and structural reforms are equally vital for sustainable growth.
The session concluded with Dr. Husain commending the minister’s reform momentum and expressing optimism about Pakistan’s ongoing economic recovery.
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