Pakistan's economy on right track, says Finance Minister Muhammad Aurangzeb

The National

23-04-2025

The recent upgrade of Pakistan's credit rating by Fitch is 'good external validation' that the country is on the right track, Finance Minister Muhammad Aurangzeb said on Wednesday. Mr Aurangzeb made the comments during a discussion at the Centre for Global Development, a Washington-based think tank that seeks to reduce international poverty through economic and policy research. Debt burdens, inflation, rising energy costs, youth unemployment and climate vulnerability have taken a toll on Pakistan's economy over the past decade. Yet in the last year, there have been some indications of improvement: inflation fell to 1.5 per cent in March, to a level not reached since 2015. Mr Aurangzeb, who was chief executive of Pakistan's largest bank HBL before being appointed Finance Minister in 2024, said the country's policy changes related to taxation, energy and state-owned enterprises have started to show progress. 'We are where we are in terms of macroeconomic stability,' he said. 'Currency stability and inflation rates are very good stories to tell.' Late last year, the Finance Minister said during discussions at the International Monetary Fund that Pakistan's economy had 'stopped the bleeding' and that the country was clamping down on tax evasion, with penalties for non-compliance being taken to 'punitive levels'. Also at the time, he said privatisation efforts were long overdue. 'The government has no business being in business,' he said. 'The private sector has to lead the country and step up.' On Wednesday, however, he acknowledged that efforts on privatisation had fallen short. 'Privatisation is one thing where we didn't make progress,' he said, explaining that he remained optimistic about those efforts, especially with Prime Minister Shehbaz Sharif appointing new privatisation chiefs. 'Under the new chairman, we're hoping to relaunch Pakistan International Airlines,' Mr Aurangzeb said, referring to the country's debt-ridden carrier. Generating revenue through enforced taxation and privatisation is a major component of Pakistan's $7 billion bailout programme approved by the IMF last year. Mr Aurangzeb was also asked about the increasingly uncertain economic outlook prompted by US President Donald Trump's tariff threats. 'If you look at the weighted average tariff on US imports into Pakistan, it's a little over 7 per cent,' he said. 'If you look at it for Pakistan's exports to the US, it's about 10 per cent. We import cotton and it's already zeroed out, so the tariffs aren't the main issue.' He said he was more concerned at the imbalance of trade. 'We export a little over $5 billion and we import a little more than $2 billion,' he added. He also said Pakistan was closely examining the idea of producing and exporting more agricultural products such as soy beans to bolster the economy and nullify trade imbalance. 'We feel we can narrow it down by a considerable amount,' Mr Aurangzeb said. His appearance in Washington coincides with the IMF and World Bank's Spring Meetings, in which he will also participate throughout the week.