Pakistan consolidates economic stability: FM

October 22, 2025 (MLN): Pakistan’s economy is showing signs of consolidation and renewed investor confidence following a year of policy discipline, fiscal stabilization, and successful engagement with the IMF, Finance Minister Senator Muhammad Aurangzeb said in an interview with CGTN America.

The government’s efforts have helped stabilise the rupee, strengthened foreign exchange reserves to 2.5 months of import cover, and brought inflation back to single digits.

“Our policy rate has been halved, and all three global rating agencies, Fitch, S&P, and Moody’s, have upgraded Pakistan this year,” the minister said, adding that the upgrades have reopened access to commercial markets after more than two years.

The IMF recently concluded its second review under the Extended Fund Facility, reaching a staff-level agreement with Pakistani authorities.

The minister noted that progress has been achieved across key reform areas, including taxation, energy, privatization, and public finance.

“We have stayed the course on structural reforms,” he said, pointing out that Pakistan completed its first privatization in years, the sale of a small bank to a UAE-based conglomerate, while the national airline is expected to be privatized before the fiscal year ends.

He highlighted Pakistan’s smooth repayment of a $500 million Eurobond in September, calling it “a total non-event” that underscored market confidence.

The country is preparing to issue its inaugural Panda bond and refresh its Global Medium-Term Note (GMTN) program for a larger international issuance next year.

Despite these gains, the minister warned that climate change remains an existential challenge. Recent floods affecting rice and cotton crops are expected to trim GDP growth from a projected 4% to around 3.5%.

On the external front, the minister said the second phase of the China-Pakistan Economic Corridor (CPEC 2.0) focuses on monetizing infrastructure through joint ventures in mining, agriculture, IT, and pharmaceuticals.

“This phase is private-sector-driven, with 24 joint venture agreements signed recently in Beijing,” he noted.

Pakistan is also accelerating its digital transformation, aiming to digitize all government payments by June next year.

AI-led monitoring and analytics have contributed to raising the tax-to-GDP ratio from 8.8% to 10.2%.

He added that Pakistan’s recent 19% tariff deal with the United States will provide an upside for textile exporters, particularly in home textiles, while the country continues to pursue trade diversification with Central Asian states.

“Macroeconomic stability is not an end in itself; it’s a means to an end,” the minister said. “Pakistan is now moving from stabilization toward sustainable, resilient growth despite global and climate headwinds.”

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