ISLAMABAD:Pakistan’s economy has rebounded with a 3.7 per cent growth rate in fiscal year 2025-26, while growth is expected to reach around 4 per cent in FY27, Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb said on Thursday.
The minister was taking to Michael Kugelman of the Atlantic Council on the sidelines of the IMF-World Bank Annual Meetings 2026 in Bangkok.
The finance minister highlighted Pakistan’s economic recovery, ongoing structural reforms and efforts to transition from macroeconomic stabilisation towards sustainable, investment- and export-led growth.
He said the government was focusing on strengthening the productive sectors of the economy, particularly industry and agriculture, while moving away from consumption-driven expansion towards a more sustainable growth model.
Aurangzeb also highlighted progress in tax reforms, saying tax revenues had increased by 40 per cent over the past two fiscal years, with the tax-to-GDP ratio reaching approximately 10.3 per cent. He attributed the improvement to digitalisation, enhanced tax administration and structural reforms.
On the privatisation agenda, the finance minister said the government was advancing plans for the privatisation of power distribution companies and outsourcing of airport operations, while efforts were underway to attract greater private-sector participation and foreign investment.
He underscored the importance of social protection in ensuring inclusive economic growth, noting that Rs838 billion had been allocated to the Benazir Income Support Programme (BISP).
The government was also prioritising targeted assistance for vulnerable households, alongside initiatives aimed at expanding employment, education and skills development opportunities.
Highlighting Pakistan’s engagement with international financial institutions, Aurangzeb said the country was strengthening its role in global financial discussions. Pakistan is chairing the Borrowers’ Platform Governing Council and is scheduled to assume the chairmanship of the Group of 24 (G-24) on November 1.
The finance minister also referred to Pakistan’s efforts to diversify financing sources and improve debt sustainability, including a successful Panda Bond issuance and the country’s return to the Eurobond market.
He said broadening access to international capital markets remained important for strengthening financial resilience and supporting long-term economic development.
Aurangzeb further emphasised the role of digital transformation in improving economic efficiency, transparency and financial inclusion. He highlighted efforts to expand digital payments, promote the adoption of artificial intelligence and develop technology-related skills to create new economic opportunities.
The finance minister reiterated that sustained economic growth would depend on continuing structural reforms, attracting investment, expanding exports and strengthening the country’s productive capacity.