Pakistan’s finance minister urges ‘course correction’ on population, climate challenges

ISLAMABAD: Pakistan’s Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, said, while Pakistan must “stay the course” on structural reforms, urgent “course correction” is needed in two existential areas: population growth and climate change.

Addressing “The Future Summit–9th Edition” in Karachi, he called for a national sense of urgency to tackle population growth, child stunting, and learning poverty, and to fully utilize the $2 billion climate-related financing available under the World Bank’s Country Partnership Framework, said a press release issued by Pakistan’s Ministry of Finance on Wednesday.

Aurangzeb called for a fundamental shift from reactive policymaking to a forward-looking, reform-driven approach aimed at stabilizing Pakistan’s economy, restoring investor confidence, and setting a sustainable course for growth.

He outlined the government’s commitment to structural reforms, fiscal discipline, and strategic partnerships to redefine the country’s economic direction.

In his remarks, the minister shared global and national perspectives drawn from his recent engagements in Washington and Riyadh, noting that the world economy has demonstrated greater resilience than anticipated, aided by structural reforms and enhanced private sector participation in many countries.

‘Macroeconomic stability’

He underscored the growing global consensus on scaling back government roles and promoting productivity-led, private sector-driven growth, alongside opportunities in artificial intelligence and technology-led innovation.

Turning to Pakistan, the finance minister reaffirmed that macroeconomic stability has been achieved and externally validated, with major rating agencies upgrading Pakistan’s outlook, and the IMF’s second review under the ongoing program concluded successfully.

However, he emphasized that macro stability “is not an end in itself but a means to an end,” forming the foundation for sustained investment and long-term growth.

‘Growing investor confidence’ 

Highlighting encouraging trends, he noted that corporate profitability in Pakistan has risen by 14% during the first nine months of 2025, and that 73% of CEOs in the latest OICCI (Overseas Investors Chamber of Commerce & Industry) survey now consider Pakistan a viable investment destination, up from 61% earlier. 

These indicators, he said, reflect growing investor confidence and the country’s improving direction.

Senator Aurangzeb pointed to a “confluence of favorable factors”, including macro stability and geopolitical tailwinds, that now position Pakistan to convert bilateral support into trade and investment flows led by the private sector.

He reaffirmed the government’s commitment to providing an enabling ecosystem in priority sectors, including minerals and mining, IT, agriculture, pharmaceuticals, and the blue economy.

Google’s office in Pakistan 

Discussing technological advancement and the knowledge-based economy, the minister welcomed Google’s decision to open an office in Pakistan and to make the country a regional technical and export hub.

He emphasized the need to equip youth with digital and technical skills to help them capture higher-value opportunities in coding, blockchain, and AI-driven sectors.

On structural reforms, Aurangzeb stressed that Pakistan is “no longer in a design phase but in the implementation mode.”

900,000 new tax filers 

He outlined progress in areas such as taxation, energy, state-owned enterprises, privatization, public finance management, rightsizing of government, pension reforms, and debt servicing.

He highlighted the use of AI-led monitoring and invoicing systems to curb tax leakages, the addition of 900,000 new tax filers, and the World Bank's international recognition of Pakistan’s reform efforts.

He reaffirmed the government’s commitment to privatization, noting the recent acquisition of a local bank by a major UAE conglomerate and ongoing work on transactions involving the PIA and power distribution companies.

Defined-contribution pension scheme

He also shared updates on the right-sizing of federal ministries and departments, the closure of loss-making entities such as the Utility Stores Corporation and the Pakistan Agricultural Storage and Services Corporation, and the transition to a defined-contribution pension scheme for new government entrants.

He concluded by reaffirming the government’s resolve to sustain economic reforms, strengthen resilience, and advance a reform agenda focused on long-term sustainability and human development.