Macroeconomic stability: minister outlines progress

Islamabad: Federal Finance Minister, Senator Muhammad Aurangzeb, detailed Pakistan's advancements in regaining economic stability and future growth prospects during a discussion at the J.P. Morgan Emerging and Frontier Markets Opportunities Conference in London. The conference attracted significant attention from international investors, with 55 global investment funds actively engaging with the Pakistani delegation.

Aurangzeb outlined six strategic priorities: reinforcing macroeconomic stability, fostering productivity-driven and export-focused growth, adhering to structural reforms, transitioning from reliance on aid to trade and investment, broadening financial access, and preparing for the digital economy, including blockchain and Web 3.0. He emphasized that the primary goal over the past three years had been to restore economic stability and restore credibility.

Progress had been made in fiscal consolidation, external sector stability, inflation control, debt management, and international market access. GDP growth rebounded to 3.7 percent in FY26, while the fiscal deficit reached a multi-year low of 2.6 percent of GDP, marking the third consecutive year of a primary surplus. The minister highlighted the government's efforts in sovereign debt management, including extended domestic debt maturities and reduced refinancing risks, which bolstered Pakistan's overall balance sheet and confidence in the economic outlook.

Senator Aurangzeb mentioned Pakistan's re-establishment of access to international capital markets through innovative instruments and a record USD3 billion dual-tranche Eurobond transaction. Privatization efforts are underway across state-owned enterprises, with notable progress in PIA, DISCOs, financial institutions, other SOEs, and airport operations. Access to finance for SMEs, agriculture, and housing is being expanded to translate macroeconomic stability into increased credit, investment, and productive activities.

Aurangzeb stressed that private capital would play a larger role in Pakistan's next growth phase, as public balance sheets could not finance this transition alone. The Governor of the State Bank of Pakistan, Jameel Ahmad, also discussed the strengthening of Pakistan's external position, citing improved foreign exchange reserves, the quality of reserve accumulation, increased remittance flows, and strengthened external-sector fundamentals.

He highlighted the role of digital financial services, external sector reforms, and financial sector advancements in contributing to macroeconomic stability and sustainable growth.