Islamabad: Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, reaffirmed Pakistans strong commitment to macroeconomic stability, structural reforms, and investor facilitation during a meeting with a delegation of German investors and businessmen led by German Ambassador to Pakistan, H.E. Ina Lepel.
The Finance Minister outlined Pakistans steady progress in restoring fiscal and external stability, achieving a stable currency, moderating inflation, and regaining the confidence of international financial institutions and credit rating agencies. He noted that the governments economic strategy is anchored in deep structural reforms ³ particularly in taxation, energy, privatization, and public finance ³ aimed at building a sustainable and competitive economy.
Welcoming the delegation, Senator Aurangzeb appreciated the role of the Pakistan-based AHK German Bilateral Chamber of Commerce in promoting bilateral business linkages and encouraging both established and new German investors to explore Pakistans evolving market. He shared insights from his recent visit to Washington D.C. for the IMF±World Bank Annual Meetings, where he engaged with multilateral partners, credit rating agencies, and global investors.
Highlighting Pakistans macroeconomic progress, the Minister said the currency remains stable, foreign exchange reserves now cover about 2.5 months of imports, and are projected to reach three months by fiscal year-end. Inflation is expected to stay between 5±7 percent during FY2025±26, supported by a downward trend in the policy rate.
He noted that Pakistans economic recovery has been externally validated by Fitch, SandP, and Moodys, which have upgraded the countrys outlook, while the recent IMF staff-level agreement following the second review further reflects international confidence in Pakistans reform trajectory.
Senator Aurangzeb underscored that economic stabilization must be complemented by deep structural reforms across key sectors. He said the government aims to raise the tax-to-GDP ratio from 10.2% to 11% this fiscal year, and to 13% over the medium term through broadening and deepening the tax base.
On the energy sector, the Minister highlighted the governments ongoing efforts to reduce losses and improve recoveries through sustainable reform and privatization. He informed that 34 state-owned enterprises have been handed over to the Privatization Commission, including one recently acquired by a UAE-based conglomerate, while the privatization of Pakistan International Airlines (PIA) is progressing, with four major international groups currently conducting due diligence.
Discussing public finance reforms, Senator Aurangzeb said measures such as pension restructuring and rationalization of the federal governments footprint ³ including the closure of non-performing entities ³ are being undertaken despite political challenges, as part of efforts to ensure fiscal discipline.
The Minister also detailed Pakistans re-entry into international capital markets, including plans to issue the inaugural Panda Bond in Chinas capital market and a return to the Eurobond market under the Global Medium-Term Note (GMTN) program in 2026. He added that improved macroeconomic indicators, positive geopolitical developments, and renewed engagement with partners in Europe, China, the United States, and the Gulf region are creating a conducive environment for foreign direct investment and business-to-business partnerships.
Responding to questions from the German delegation, Senator Aurangzeb elaborated on initiatives to promote IT exports, facilitate profit and dividend repatriation for foreign firms, and strengthen investor confidence in Pakistans long-term economic trajectory.