Finance Minister Invites Global Stakeholders to Invest in Priority Sectors

In an exclusive article published as part of the World Economic Forum Annual Meeting, Minister of Finance and Revenue Muhammad Aurangzeb has invited the global stakeholders “to support Pakistan’s journey by investing in priority sectors such as agriculture, IT, renewable energy and pharma”. In the article published on the WEF web site, the Minister highlights the transformative journey embarked upon by Pakistan in recent years towards economic stabilization and growth. “Confronted with formidable challenges, we implemented decisive reforms to build a robust foundation for sustainable and inclusive development. Today, the results of these efforts are becoming evident, with the economy demonstrating resilience and renewed potential,” he says. “When I assumed office as Finance Minister in 2024, Pakistan faced severe fiscal and monetary pressures. Inflation had surged to 38%, straining households and eroding purchasing power. Foreign exchange reserves had dropped dangerously low, barely covering two weeks of essential imports like food and fuel. Industrial output had contracted by 10.3%, and GDP growth had plummeted to 0.2%. The compounded effects of COVID-19 and devastating floods causing over $30 billion in damages further tested our resilience”. He stated that critical measures, including stabilizing the exchange rate, tightening fiscal policies, and targeted monetary interventions, were implemented to address the economic crisis. Backed by the IMF’s $7 billion Extended Fund Facility, structural reforms in energy and taxation were launched alongside the “Uraan Pakistan” initiative. This 2024 economic transformation plan aims for a 6% GDP growth by 2028, focusing on agriculture, energy, IT, textiles, and pharmaceuticals through public-private partnerships and export-driven strategies. A key aspect of Uraan Pakistan involves a $20 billion partnership with the World Bank, targeting health, education, poverty alleviation, and climate resilience. The plan also integrates sustainability with development goals to align with the UN Sustainable Development Goals. Aurangzeb noted that the reform-oriented budget introduced in July 2024 aimed to increase revenue to Rs13 trillion, a 40% rise. This was achieved by broadening the tax base, focusing on under-taxed sectors such as agriculture, real estate, and trade, and leveraging technology for transparency. Modernizing the Federal Board of Revenue has significantly streamlined tax administration. The minister reported marked improvements in key economic indicators. Inflation has dropped to 4.1%, foreign exchange reserves now cover over two months of imports, and goods exports have risen by 7.1%. The IT sector has grown 28% year-on-year, while foreign direct investment increased by 20% in the first half of fiscal 2025. Remittances reached a record $35 billion, and the equity market delivered an 87% dollar-based return. Pakistan’s global default risk has decreased by 93%, with all three top global rating agencies upgrading sovereign ratings. Moody’s revised the country’s outlook to “Positive” in September 2024. Despite these achievements, challenges persist. The government is addressing inefficiencies in revenue collection, energy, state-owned enterprises, and privatization. Aurangzeb urged global stakeholders to invest in priority sectors such as agriculture, IT, renewable energy, and mining while taking advantage of Special Economic Zones. The minister emphasized the importance of political will, a skilled workforce, and natural resources in achieving long-term economic stability. He concluded by asserting Pakistan’s potential to become a regional and global economic leader through resilience and collective effort.