Finance Minister Urges Caution as Pakistan Sees Signs of Economic Progress

WASHINGTON (RNN TV) — Finance Minister Muhammad Aurangzeb has expressed cautious optimism about Pakistan’s economic outlook, highlighting early signs of stability while stressing the need to maintain reform momentum and avoid past missteps.

Speaking at the Atlantic Council’s GeoEconomics Center during the IMF-World Bank Spring Meetings, Aurangzeb drew a cricket analogy, saying Pakistan has “put some runs on the scoreboard,” but emphasized the importance of consistent performance and sound policy decisions moving forward.

The minister cited an increase in foreign exchange reserves, easing inflation, a more positive credit outlook, and a narrowing fiscal deficit as indicators of recent progress. However, he described these improvements as early gains, underscoring the need for long-term structural reforms.

Aurangzeb noted a 29% rise in tax revenues and projected the tax-to-GDP ratio to hit 10.6% by the end of the fiscal year. He also pointed to better debt management and cost-cutting initiatives that have created fiscal space.

For the first time, agricultural income has been brought into the tax net—an important step in expanding the country’s revenue base. The minister also highlighted the importance of coordination with provinces through the National Finance Commission to achieve shared fiscal goals.

To broaden the formal economy, Aurangzeb said new enforcement tools such as digital audits, track-and-trace systems, and faceless customs processes are being rolled out, noting that a significant volume of cash still circulates outside the formal financial system.

Addressing social and environmental challenges, he emphasized the need for integrated planning in areas like population growth, education, and climate resilience. On the environmental front, Aurangzeb said Pakistan is developing a Green Taxonomy Framework to enable sustainability-linked financing through instruments such as green bonds and sukuks.

He welcomed renewed engagement with multilateral institutions including the IMF, World Bank, and Asian Development Bank, acknowledging their role in supporting Pakistan through new financing arrangements.

Concluding his remarks, the finance minister called for reforms in global financial systems to better support developing nations and proposed the establishment of a dedicated platform to manage concessional finance more efficiently.

Source: Web Desk