Economy Shows Signs of Recovery, Says Finance Minister
ISLAMABAD: Finance Minister Muhammad Aurangzeb has announced that Pakistan’s economy is “moving in the right direction,” with visible signs of improvement across key sectors.
Speaking at a joint press conference with the government’s economic team on Monday, Aurangzeb said the administration had made “significant progress toward achieving macroeconomic stability.” He cited the recent staff-level agreement with the International Monetary Fund (IMF) as validation of Pakistan’s economic recovery efforts.
He emphasized that the government’s primary goal is to achieve sustainable economic stability through deep structural reforms. “Long-term growth depends on fundamental reforms in taxation, energy, and other core sectors,” he said.
Aurangzeb added that pension reforms and right-sizing remain integral to the reform agenda. He noted that three major global rating agencies have affirmed Pakistan’s macroeconomic stability and thanked international partners — including the Gulf Cooperation Council (GCC), China, and the United States — for their continued support.
Tax Reforms and Fiscal Discipline
Federal Board of Revenue (FBR) Chairman Rashid Langrial reported a notable improvement in the country’s fiscal position. He said Pakistan’s tax-to-GDP ratio rose by 1.5%, marking the first such increase in years.
The number of individual taxpayers also climbed to 5.9 million, reflecting an 18% increase in tax filings compared to the previous year. Langrial revealed the government’s medium-term goal of raising the tax-to-GDP ratio to 18%.
He stressed that meaningful tax reforms take time and dismissed speculation about new taxes in the near future. Instead, he underlined the importance of broadening the tax base and enhancing compliance to ensure sustainable revenue growth.
Overhaul in Energy Sector
Energy Minister Awais Leghari announced sweeping changes in the country’s energy management, saying the government is modernizing the sector to reduce inefficiencies and costs.
He said that over the past 18 months, electricity prices were reduced by up to 10.5%, while the electric vehicle (EV) tariff dropped from Rs71 to Rs39 per unit. He credited the reforms for saving billions of rupees and resolving technical bottlenecks.
Leghari disclosed that the circular debt was cut by Rs700 billion in a year, while a Rs1.2 trillion loan agreement was secured to further address the issue.
He also revealed that the government will cease purchasing electricity and instead introduce automated, prepaid metering systems across the country within three years.
Privatisation Drive Gains Momentum
Adviser to the Prime Minister on Privatisation Muhammad Ali said the government is moving swiftly to ensure transparency and efficiency in its privatisation efforts.
He shared that the First Women Bank had been sold for Rs5 billion to a UAE-based company, which has now entered Pakistan’s market.
On the Pakistan International Airlines (PIA) privatisation, Ali noted that four consortiums are currently in the running, and the government aims to finalize the deal before year-end.
He said experienced global investors are being encouraged to take part, and financial experts are being engaged to strengthen the process. The privatisation of key power distribution companies — IESCO, LESCO, and FESCO — has also begun.
Right-Sizing Government Institutions
Coordinator to the Prime Minister for Right-Sizing Salman Ahmad announced that 54,000 vacant posts have been abolished as part of efforts to streamline governance.
He said 20 ministries have already undergone restructuring and that the Pakistan Agricultural Storage and Services Corporation (PASSCO) — identified as a loss-making entity — will be shut down.
The move, he explained, aims to eliminate wastage of taxpayers’ money while retaining profitable or essential public institutions.
Toward a Cashless, Digital Economy
Federal Minister for IT and Telecommunication Shaza Fatima Khawaja said Pakistan is transitioning toward a cashless digital economy, following Prime Minister-led initiatives.
She said three committees have been formed to guide the transformation, with the Digital Nation Pakistan roadmap already in motion after the passage of the Digital Nation Pakistan Act earlier this year.
Khawaja emphasized that digitalisation will play a central role in expanding the tax net and increasing transparency. Through platforms like the Raast payment system, she said, “digital transactions will become easier, traceable, and integrated across all government institutions.”
Outlook
The government’s economic team projected cautious optimism, stressing that while the path ahead demands persistence and reform continuity, the current indicators suggest that Pakistan’s economy is regaining balance and laying the groundwork for sustainable long-term stability.
