Islamabad, December 15, 2025: Finance Minister Muhammad Aurangzeb has said Pakistan is moving away from aid-based support towards trade- and investment-led engagement, with a strong focus on deepening economic partnerships with countries of the Gulf Cooperation Council (GCC).
In an interview with CNN Business Arabia, the finance minister said the strategic shift—clearly articulated by Prime Minister Shehbaz Sharif—reflects Pakistan’s renewed economic confidence and reform momentum, aimed at achieving long-term economic sustainability.
Aurangzeb said Pakistan has remained on a comprehensive macroeconomic stabilisation programme for the past 18 months, delivering what he described as “tangible and measurable” results. Inflation, which had peaked at an unprecedented 38 per cent, has now declined to single-digit levels, he noted.
Highlighting improvements on the external front, the finance minister pointed to the achievement of primary surpluses, a current account deficit “well within” targeted limits, a stabilised exchange rate, and foreign exchange reserves improving to around 2.5 months of import cover, reflecting stronger external buffers.
He cited two major external validations of Pakistan’s improving outlook, noting that all three international credit rating agencies have upgraded Pakistan’s ratings and outlook this year. He also referred to the completion of the second review under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF), with the IMF Executive Board approving the review earlier this week—developments he said signal growing international confidence in Pakistan’s economic management and reform trajectory.
Aurangzeb said macroeconomic stability has been achieved through a coordinated approach combining disciplined monetary and fiscal policies with an ambitious structural reform agenda. Reforms, he added, are under way across taxation, energy, state-owned enterprises, public financial management and privatisation to consolidate stability and lay the foundations for sustainable growth.
On taxation, the finance minister said Pakistan’s tax-to-GDP ratio has improved from 8.8 per cent at the start of the reform programme to 10.3 per cent in the last fiscal year, with a clear path towards 11 per cent. He said the government aims to ensure fiscal sustainability by widening the tax base and bringing undertaxed but economically significant sectors—such as real estate, agriculture, and wholesale and retail trade—into the formal economy.
He added that the reform plan includes deepening compliance by reducing leakages through production monitoring systems and AI-enabled technologies, alongside reforms in people, processes and technology to modernise tax administration.
In the energy sector, Aurangzeb highlighted efforts to improve governance in distribution companies, bring in private-sector expertise, advance privatisation and reduce circular debt, which he said has long constrained the power sector. Rationalising the tariff regime, he noted, is essential to make energy more competitive for industry and support economic growth.
Acknowledging the longstanding support of GCC countries—including Saudi Arabia, the United Arab Emirates and Qatar—the finance minister said their relationship with Pakistan is now evolving towards a new phase centred on trade expansion and investment flows, rather than financing alone.
He said remittances continue to play a vital role in supporting the current account, reaching about $38 billion last year and projected to rise to $41–42 billion this year, with more than half originating from GCC countries.
Looking ahead, Aurangzeb said Pakistan is engaging GCC partners to attract investment in priority sectors, including energy, oil and gas, minerals and mining, artificial intelligence, digital infrastructure, pharmaceuticals and agriculture. He also expressed optimism over progress on a Free Trade Agreement (FTA) with the GCC, saying discussions are at an advanced stage.
Reiterating the government’s direction, the finance minister said Pakistan’s future lies in fostering trade and investment partnerships rather than reliance on aid, arguing that foreign direct investment into productive sectors would support higher GDP growth, generate employment and deliver shared economic benefits for Pakistan and its partners.
