Finance Minister Muhammad Aurangzeb underscored Pakistan’s strategic shift from seeking aid-based support towards trade- and investment-led engagement to ensure long-term economic sustainability and mutually beneficial partnerships, particularly with the Gulf Cooperation Council (GCC) countries.

In an interview with CNN Business Arabia, Aurangzeb highlighted the vision of Prime Minister Shehbaz Sharif, which reflected Pakistan’s renewed economic confidence and reform momentum.

He said that Pakistan has followed a comprehensive macroeconomic stabilisation program for the past 18 months, which has delivered tangible and measurable results, while inflation has declined to single-digit levels from an unprecedented 38%.

On the fiscal front, Pakistan has achieved primary surpluses, while the current account deficit remains well within targeted limits. According to the finance czar, the exchange rate has also stabilised, and foreign exchange reserves have improved to approximately 2.5 months of import cover, reflecting strengthening external buffers.

He maintained that the country has two major external validations, which indicate Pakistan’s improving economic outlook.

Firstly, he said, all three international credit rating agencies have aligned their assessments this year by upgrading Pakistan’s ratings and outlook. On the other hand, the country has completed the second review under the IMF Extended Fund Facility, with the IMF Executive Board granting its approval earlier this week.

He stated that such developments demonstrate growing international confidence in Pakistan’s economic management and reform trajectory.

The finance minister further emphasised that macroeconomic stabilisation has been achieved through a coordinated approach combining disciplined monetary and fiscal policies with an ambitious structural reform agenda.

“Reforms are being implemented across key areas, including taxation, energy, state-owned enterprises, public financial management, and privatisation, aimed at consolidating stability and laying the foundation for sustainable growth,” Aurangzeb said.

The finance minister also highlighted the significant progress in Pakistan’s improvement of the tax-to-GDP ratio.

“During the last fiscal year, it increased to 10.3 per cent, with a clear path towards 11 per cent,” the finance minister said.

He further explained the government’s objective to reach a level of tax collection that ensures fiscal sustainability over the medium to long term.

“This is being pursued through widening the tax base by bringing previously undertaxed but economically significant sectors such as real estate, agriculture, and wholesale and retail trade into the formal net, alongside deepening compliance by reducing leakages through production monitoring systems and AI-enabled technologies. Simultaneously, the tax administration is being transformed through reforms in people, processes, and technology,” he said.

The minister further highlighted efforts to improve governance in [power] distribution companies, involve private sector expertise, advance privatisation, and reduce circular debt, which has long constrained the power sector.

“Rationalising the tariff regime is essential to making energy more competitive for industry, thereby enabling industrial revival and economic growth,” he stressed.

Senator Aurangzeb acknowledged the longstanding support of GCC countries, including Saudi Arabia, the United Arab Emirates, and Qatar, for their critical role in critical role supporting Pakistan through financing, funding, and cooperation at international financial institutions such as the International Monetary Fund.

“This relationship is now evolving towards a new phase centred on trade expansion and investment flows. Remittances continue to play a vital role in supporting the current account, with inflows reaching approximately $38 billion last year and projected to rise to $41-42 billion this year, over half of which originates from GCC countries,” he added.

He further said, “Pakistan is actively engaging with GCC partners to attract investment in priority sectors including energy, oil and gas, minerals and mining, artificial intelligence, digital infrastructure, pharmaceuticals, and agriculture.”

Expressing optimism regarding progress on a Free Trade Agreement (FTA) with the GCC, he termed the discussions at an “advanced stage”.

Senator Aurangzeb reiterated the government’s strategic direction in shifting the collective focus on trade rather than relying on aid.

“Pakistan’s future lies in fostering trade and investment partnerships rather than reliance on aid,” said the finance minister.

He also emphasised the role of foreign direct investment in supporting the higher GDP growth, generating employment opportunities, and delivering shared economic benefits for Pakistan and its partners.

“The government is fully mobilised to translate this vision into reality.” He concluded.

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The State Bank of Pakistan (SBP) on Monday slashed its policy rate by 50 bps to 10.5 per cent.

The last reduction in the policy rate came in May. Since then, the benchmark rate has been held at 11 per cent, even as headline inflation dipped to 3pc earlier this year. November inflation was recorded at 6.1pc, compared to 6.2pc in October.

The International Monetary Fund (IMF) had advised maintaining tight liquidity to curb expected inflation, despite mounting industry pressure.

In a second review released on Thursday, the Fund said the monetary policy needed to remain “appropriately tight and data-dependent” to keep expectations anchored, while noting that the SBP had maintained positive real interest rates on a forward-looking basis.

It said the tight stance had been pivotal in reducing inflation and should be maintained to ensure price stability and support the rebuilding of external buffers.

Industrial leaders had previously called for a reduction in interest rates to help them stay competitive globally.

More to follow

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LAHORE: The ongoing development projects — both public and private sectors — have come to a grinding halt in Lahore and other parts of Punjab after the suspension of delivery of supplies of construction material due to the ongoing wheel-jam strike by goods transporters.

The situation of dust pollution, smog and other environmental issues has also worsened due to the incomplete projects, Dawn has learnt.

“At present, the work on all the ongoing development projects in which construction material (mainly cement, crushed stones etc) is required is stopped for the last seven days or so due to the suspension of material delivery from Sargodha and other parts of Punjab,” commented an official of the Lahore Development Authority (LDA). “The situation persists not only in Lahore but also in other cities and towns of the province where a huge number of development works are underway at the moment,” he added.

According to another official source in the Metropolitan Corporation Lahore, the work on the ongoing development schemes under the Lahore Development Plan (LDP) has also slowed down due to the non-supply of construction material. “The concrete work is a vital part of construction that cannot be completed without crushed stones, cement and other items,” he explained.

Public and private sector development projects in Punjab have come to a grinding halt owing to the lack of construction material delivery

Talking to Dawn, a private builder said that all construction-related activities requiring core building material had stopped or slowed down not only in Lahore but also in other cities including Faisalabad, Gujranwala, Rawalpindi, Sahiwal, Bahawalpur and Multan. “At present, no work is in progress at the under-construction building requiring brickwork, lenter, plaster, tilework etc, as there is no supply of cement, crushed stone and other material. Even those constructing their houses privately have no option but to stop work in such a terrible situation,” he explained. He requested the government to make efforts to resume business activities as the same was also causing unemployment.

On the other hand, the transporters have refused to surrender before the government till the acceptance of their demands, including suspension of the controversial clauses of the Motor Vehicle Ordinance 2025, stopping registration of FIRs against drivers, imposition of heavy fines and impounding vehicles on various traffic laws violations.

“We will not call off the strike until the acceptance of our genuine demands,” said Khalid Arain of the Punjab Stone Transporters Association based in Sargodha. “We can call off the strike if, at least, someone responsible can give us an assurance to resolve our issues within the shortest possible time,” he said, requesting the government to cooperate for the sake of a huge number of people having no work due to the strike.

EXHIBITION: The annual Chrysanthemum Flower Show 2025, organised by the Parks & Horticulture Authority (PHA), is in full swing at the Jilani Park, captivating citizens with its vibrant colours, pleasant fragrance, and creative floral displays.

The event has emerged as a major attraction for families, with more than 100,000 people visiting the park over the weekend alone to enjoy the breathtaking exhibition.

According to PHA Managing Director Raja Mansoor Ahmad, the visitors had appreciated the excellent arrangements, artistic presentation, and innovative landscaping showcased at the exhibition. Featuring more than 200 varieties of flowers and thousands of beautifully arranged flowerpots, the show has transformed Jilani Park into a mesmerizing blend of colors and scents. The park has become a serene, family-friendly, and visually appealing recreational destination for children, women, and men alike.

“Chrysanthemum Flower Show will continue at Jilani Park until December 15,” said the MD. He said that the annual flower show had proven to be a special gift for the public. “So far, more than 1.5 million visitors have attended the exhibition, reflecting its immense popularity and public appreciation,” he added.

Published in Dawn, December 15th, 2025

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