Finance Minister links privatization, PPPs to lasting economic stability

September 04, 2026 (MLN): Sustained private capital mobilization through privatization and public-private partnerships (PPPs) will be essential to moving the economy from stabilization to durable, investment-led growth.

Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, made these remarks while delivering the keynote address at the "Mobilizing Private Capital: National Strategic Dialogue on PPPs and Privatisation," organized by the Asian Development Bank (ADB), which was broadcasted live.

The minister said the government's foremost priority remains preserving the hard-earned macroeconomic stability achieved through tough policy decisions, cautioning against any relapse into the boom-and-bust cycles of the past.

He said the central question going forward is how to translate stabilization into sustainable growth, with an enabled private sector positioned to lead that transition  the context in which privatization and PPPs assume central importance.

On the macroeconomic front, Senator Aurangzeb said Pakistan's twin deficit had narrowed to 2.6% over the past two and a half years.

On the fiscal side, he attributed the improvement to a combination of higher revenue collection, aided by technology-driven reforms at the Federal Board of Revenue (FBR), and expenditure controls on civil government operations and debt servicing.

He noted that FBR revenues have grown 40% over the last two years, lifting the tax-to-GDP ratio from 8.8% to 10.3%, though he said considerable ground remains to be covered, with the ratio needing to rise to 11-12% in the short term.

On the external side, the minister said remittance inflows have performed strongly, while IT and IT-enabled services exports have emerged as a standout growth story, reaching $4.6bn, of which $1.6bn was contributed by freelancers last year. He said overall exports, flat at around $30bn, still require concerted attention going forward.

Senator Aurangzeb pointed to three sovereign rating upgrades since April 2025, which he said have enabled Pakistan's return to international capital markets.

For the current fiscal year, he said the government is targeting economic growth of above 4%. He added that foreign exchange reserves stood at $18.4bn as of June 30, with a target of $21bn by the end of the fiscal year  a level that would provide import cover of just over three months.

The minister said the government's overreliance on the banking system to meet its borrowing needs is no longer sustainable, emphasizing the need to deepen debt capital markets and diversify the investor base to include insurers and other non-bank financial institutions (NBFIs).

He cited the Ministry of Finance's collaboration with JazzCash, along with an application recently launched by the State Bank of Pakistan (SBP), as initiatives enabling direct retail participation in government securities, allowing investors to enter with as little as Rs5,000.

On debt management, Senator Aurangzeb said the government is moving forward with a rupee-denominated, dollar-settled bond, and is separately examining the tokenization of existing Eurobond debt, drawing on a model adopted by Hong Kong.

He concluded that the government is pursuing a whole-of-government approach in full support of both the privatization program and the public-private partnership agenda.

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