Pakistan, UK boost economic and climate partnership

October 23, 2025 (MLN): Pakistan and the United Kingdom have reaffirmed their commitment to deepening bilateral cooperation in economic reforms, climate resilience, and private sector–led growth.

This was discussed during a meeting between Finance Minister Senator Muhammad Aurangzeb and British High Commissioner to Pakistan Ms. Jane Marriott CMG OBE at the Finance Division, said a press release issued.

The finance minister appreciated the UK’s longstanding development partnership with Pakistan and thanked the British government for its continued support in key areas including digitalization, public financial management, and climate resilience.

He also recalled his recent meeting with UK Minister for International Development and Africa, Baroness Jenny Chapman, in Washington D.C., highlighting the UK’s valuable contributions to the Digital Dashboard initiative and other development programs.

Briefing the High Commissioner on Pakistan’s economic outlook, Aurangzeb said that the country had transitioned from stabilization to economic consolidation, supported by recent reforms and strengthened fiscal management.

He noted that all three major global rating agencies had upgraded Pakistan’s outlook after three years, reflecting renewed investor confidence.

The minister underscored that the recent staff-level agreement with the IMF, along with robust engagement with international institutions and bilateral partners, was evidence of growing external validation of Pakistan’s economic direction.

He emphasized that the government’s focus remained on ensuring macroeconomic stability while shifting toward investment- and export-driven growth to break historic boom-bust cycles.

Discussing investment and trade, the finance minister highlighted ongoing efforts to liberalize the trade regime by gradually reducing additional customs duties over the next four to five years to improve industrial competitiveness.

He also stressed the importance of generating bankable projects, strengthening private sector–led investment pipelines, and leveraging business-to-business linkages to attract both domestic and foreign investment.

On tax reforms, it was shared that the government was advancing documentation and digitalization initiatives, broadening the tax base, and introducing AI-based monitoring systems to curb evasion.

Integrity-based peer review mechanisms were being introduced to restore public trust and ensure effective service delivery. With tax policy now moved out of the Federal Board of Revenue (FBR), sector-specific advisory mechanisms would be established to enhance engagement with key industries.

The minister also discussed policy priorities including incentives for retaining skilled talent, easing regulatory hurdles for foreign investors, and addressing sector-specific tax challenges, particularly in the IT sector.

Marriott commended the government’s achievements in implementing tough economic reforms, achieving a primary surplus after 14 years, and improving fiscal discipline.

She noted that investor confidence particularly among businesses in Karachi was strengthening and emphasized the importance of sustaining reform momentum and enhancing the social contract with taxpayers.

The High Commissioner welcomed Pakistan’s initiatives in digitalization and tax administration and reaffirmed the UK’s readiness to provide technical assistance in areas such as IT, climate finance, and public financial management.

She also discussed potential avenues for further UK support through REMIT and called for continued progress on ongoing collaborative initiatives.

Both sides expressed their shared resolve to strengthen economic ties and advance cooperation in sustainable development, investment, and governance reforms to foster long-term stability and growth.

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