Finance Minister Muhammad Aurangzeb announced that Pakistan aims to achieve economic growth exceeding 4 percent during the current fiscal year, alongside increasing foreign exchange reserves to $21 billion by year-end. This marks a rise from the $18.4 billion recorded on June 30.
Speaking at a conference hosted by the Asian Development Bank on Friday, Aurangzeb highlighted that the enhanced reserves target would provide just over three months of import cover, which he described as a solid international standard. However, he acknowledged that further efforts are necessary to consolidate progress in this area.
In a significant development, Aurangzeb pointed to Pakistan’s recent return to international capital markets, exemplified by a $3 billion Eurobond issuance. This move reflects growing external confidence in the country’s economic trajectory. Since April 2025, Pakistan has received three sovereign credit upgrades, enabling its re-entry into global capital markets after a four-year hiatus. The order book for the Eurobond was reportedly twice the amount issued, attracting a diverse investor base from Asia, the Middle East, Europe, and the United States. The minister described this as a strong endorsement of Pakistan’s economic direction.
Aurangzeb emphasized that structural reforms in the energy sector, state-owned enterprises (SOEs), and privatisation are interconnected. Progress in SOE restructuring and privatisation depends heavily on parallel reforms within the energy sector. To date, 27 transactions have been submitted to the privatisation commission, and several loss-making SOEs have been closed. He cited examples such as Utility Stores Corporation, Passco, and the Public Works Department, describing these closures as difficult but necessary decisions to move forward.
Regarding public finances, the minister stressed the importance of managing debt servicing costs and pension reforms. He also highlighted the government’s efforts to reduce its overreliance on borrowing from the banking sector, which he deemed unsustainable. To diversify the investor base, the government is engaging insurance companies and non-bank financial institutions.
Notably, a recent collaboration between the Ministry of Finance, JazzCash, and the State Bank of Pakistan now allows retail investors to purchase government securities via mobile apps with a minimum investment of Rs5,000. Additionally, plans are underway to introduce a rupee-denominated, dollar-settled bond, with institutions already mandated. The government is also exploring tokenisation of existing Eurobond debt, inspired by a model implemented in Hong Kong.
Addressing the ongoing regional conflict, Aurangzeb stated that the government is closely monitoring its potential effects on growth and inflation forecasts. He affirmed that the leadership remains committed to addressing these challenges, emphasizing the critical importance for Pakistan’s economy, the region, and the global economy. The prime minister and chief of defence forces are actively engaging with both the Trump administration and Iranian leadership.
On privatisation, Aurangzeb praised the privatisation adviser’s leadership, highlighting the recent Pakistan International Airlines (PIA) transaction as a positive indicator, especially due to the involvement of major local conglomerates. He stressed that while foreign direct investment is important, local investors must first demonstrate their commitment to investing, which in turn sends a strong signal to international investors. He also noted a growing willingness among competing local consortiums to collaborate, a trend expected to benefit upcoming transactions involving power distribution companies (DISCOs).
The minister welcomed the government’s decision to place public-private partnerships (PPPs) under the privatisation commission. He has tasked the privatisation adviser with leveraging the Sindh government’s successful PPP experience to develop a similar framework at the federal level. Efforts are also ongoing to strengthen the private equity and venture capital sectors, with discussions focusing on related taxation and regulatory frameworks.
