Pakistan Eyes Economic Turnaround as Finance Minister Unveils Privatization Plan for 28 State-Owned Firms

Islamabad: Pakistan’s economy is moving toward greater stability, Finance Minister Muhammad Aurangzeb said on Tuesday, highlighting improved economic indicators and announcing that 28 state-owned enterprises have been earmarked for privatization as part of the government’s reform agenda.

Speaking at the inaugural session of the Pakistan Banking Summit 2026, organized by the Pakistan Banks Association, the finance minister said the country’s GDP grew by 3.7% in the last fiscal year, driven largely by the recovery in large-scale manufacturing.

He added that a strong inflow of remittances helped maintain a stable current account balance.

Aurangzeb said workers’ remittances are projected to reach $41–42 billion during the 2025–26 fiscal year, while value-added exports have also contributed significantly to macroeconomic stability. He noted that Pakistan’s foreign exchange reserves have climbed to $18.4 billion, and the country has regained access to international capital markets through instruments including Eurobonds and Panda Bonds.

The finance minister also highlighted growing investor confidence, stating that the Pakistan Stock Exchange launched 11 Initial Public Offerings (IPOs) during the last fiscal year, with young investors, particularly Generation Z, increasingly participating in the equity market.

He said the government financed recovery efforts from the 2025 floods through domestic resources rather than relying on international aid.

On taxation, Aurangzeb announced that the super tax on businesses valued below Rs500 million has been abolished to support small enterprises. He added that the construction sector has received relief measures, while all duties on agricultural machinery have been removed to boost farm productivity.

The minister said the government is expanding the tax base by bringing the retail sector into the formal tax system and reducing human intervention in tax collection through modern technology. He emphasized that the government does not support a final tax regime and instead seeks a simpler, fairer tax system based on taxpayers’ capacity.

Aurangzeb further revealed that monthly investment through Roshan Digital Accounts has increased from $180 million to $300 million over the past three months. He said improving access to finance for small and medium-sized enterprises (SMEs) remains a key priority.

He added that No Objection Certificates (NOCs) had been issued to exchange companies in December 2025 to facilitate progress in artificial intelligence, blockchain, and virtual assets, while urging commercial banks to strengthen their cybersecurity frameworks.

Speaking to the media after the event, the finance minister said trade with Iran remains at an early stage following regional tensions involving the United States, but expressed optimism that bilateral trade would expand.

He added that strengthening economic ties with fellow Islamic countries remains a government priority and confirmed that consultations on the National Finance Commission (NFC) Award are ongoing.