Pakistan’s “innovative approaches” in taxation and economic stabilisation offer “valuable lessons” for other developing economies, Finance Minister Muhammad Aurangzeb wrote in an article in the World Economic Forum (WEF) published on Tuesday.
Pakistan’s finance czar is currently in Davos to attend the WEF Annual Meeting that is taking place between January 20 and 25. The Annual Meeting 2025 convenes global leaders to address key global and regional challenges. These include responding to geopolitical shocks, stimulating growth to improve living standards, and stewarding a just and inclusive energy transition.
“Pakistan has embarked on a transformative journey towards economic stabilisation and growth. Confronted with formidable challenges, we implemented decisive reforms to build a robust foundation for sustainable and inclusive development,” he wrote in the article titled, ‘Pakistan’s economic revival: a path towards sustainable and inclusive growth’.
“Today, the results of these efforts are becoming evident, with the economy demonstrating resilience and renewed potential,” the article read.
Aurangzeb stated that Pakistan was facing severe fiscal and monetary pressures when he assumed office as the finance minister.
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He mentioned that inflation hit record 38%, while foreign exchange reserves were standing at what he called dangerously low level as they could cover only two weeks of essential imports such as food and fuel.
“The compounded effects of Covid-19 and devastating floods causing over $30 billion in damages further tested our resilience.”
Aurangzeb wrote that a series of necessary reforms was implemented after he took the office.
“These included stabilising the exchange rate, tightening fiscal policies, and curbing inflation through targeted monetary interventions. With support from the IMF’s Extended Fund Facility (EFF) worth $7 billion, we initiated structural improvements in critical sectors such as energy and taxation.
“Central to this effort was ‘Uraan Pakistan’, an economic transformation plan launched in 2024. This initiative aims to achieve sustainable, export-led 6% GDP growth by 2028 through public-private partnerships, enhanced export competitiveness and optimized public finances. Priority sectors include agriculture, energy, textiles, pharmaceuticals and IT,” he wrote.
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The finance minister added that Uraan Pakistan also addresses critical challenges such as child malnutrition, educational outcomes, and clean energy adoption.
“By integrating sustainability into our development framework, we are contributing to global efforts to achieve the United Nations Sustainable Development Goals (SDGs).”
In June 2024, the government introduced what Aurangzeb called a reform-oriented budget with an ambitious goal of raising Rs13 trillion in revenue – a 40% increase from the previous year.
“These reforms focused on broadening the tax base by targeting under-taxed sectors like agriculture, real estate and trade, while leveraging technology to enhance compliance and transparency. Modernising the Federal Board of Revenue (FBR) has been instrumental in streamlining tax administration.”
He further wrote that Pakistan’s economy is on a path to recovery, with inflation dropping to 4.1% [in January 2025] and the foreign exchange reserves providing over two months of import coverage.
“Goods exports have risen by 7.1%, and the IT sector has grown by an impressive 28% year-on-year. Pakistan’s global default risk has dropped by 93%, signaling renewed faith in the country’s fiscal stability.
“Local and foreign investors, including global giants like Aramco, BYD and Samsung, are contributing to this economic revival, reflecting Pakistan’s potential as a lucrative investment hub.”
The finance minister also mentioned that Pakistan’s current account has been in surplus for months, and investor confidence is at “a two-year high”.
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Foreign direct investment (FDI) grew by 20% in the first half of fiscal year 2025, according to the finance czar.
“Initiatives like the Roshan Digital Account have attracted over $9 billion in inflows, while remittances have reached a record $35 billion this year. Additionally, Pakistan’s equity market delivered an 87% return in dollar terms, underscoring strong investor sentiment,” Aurangzeb wrote.
Pakistan’s progress was acknowledged, with all three top global rating agencies upgrading the country’s sovereign ratings. Moody’s revised Pakistan’s economic outlook to ‘Positive’ in September 2024, recognising the impact of our policy measure, he added.
Aurangzeb invites global stakeholders
To break free from cycles of external assistance, Pakistan is addressing structural inefficiencies in revenue collection, energy, state-owned enterprises (SOEs) and privatisation, the finance minister stated.
Rightsizing the federal government, reforming SOEs, and fostering export-led growth will strengthen internal revenue streams and reduce reliance on international funding programmes, according to Aurangzeb.
He invited global stakeholders to support Pakistan’s journey by investing in priority sectors such as agriculture, IT, renewable energy, mining and minerals, textiles and apparels, pharmaceuticals, while capitalising on the Special Economic Zones (SEZs).
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Partnerships in climate resilience and sustainable development are crucial for advancing shared global goals, according to Aurangzeb.
“With a remarkable workforce, abundant natural resources, and immense production potential, Pakistan is poised to soar to new heights – contributing to regional stability and global economic progress,” he wrote.