KARACHI – Finance Minister Muhammad Aurangzeb on Wednesday said that reducing government expenditure is essential to support the country’s armed forces amid internal and border security challenges.
“We aim to save money to assist our armed forces,” he stated while addressing members of the Karachi Chamber of Commerce and Industry (KCCI) on Tuesday.
Aurangzeb stressed that enhancing revenue generation is vital for running the country efficiently. “The government must curtail its spending and limit borrowing from banks,” he said, adding that it was concerning that loans to the private sector were declining. He revealed that the State Bank governor would seek an explanation from commercial banks over the slow pace of public-private lending.
He clarified that the government was not compelled to borrow from banks and had already reduced interest on loans. The finance minister announced that next year’s budget would be prepared by the Tax Policy Office instead of the Federal Board of Revenue (FBR), and confirmed that Pakistan had reached a staff-level agreement with the International Monetary Fund (IMF), with the next tranche expected soon.
Aurangzeb pointed out that subsidies granted to ghee and tea factories in the former FATA and PATA regions posed a risk to the economy. He vowed to prevent a rise in commodity prices, saying that the sugar and wheat markets would soon be deregulated.
He further revealed that the Reko Diq project would become fully operational by 2028, with Pakistan’s first export under the project estimated at $2.8 billion.
Earlier, while speaking at the 9th edition of The Future Summit, the minister announced that the government had decided to privatize 24 state-owned enterprises, including Pakistan International Airlines (PIA), whose privatization would be completed before the end of this year. He added that 39 ministries were being merged as part of the government’s “right-sizing” initiative.
Aurangzeb said Pakistan’s economic situation was improving and acknowledged financial support from China, the United States, Saudi Arabia, and the United Arab Emirates. He disclosed that taxes would be increased in the sugar, cement, and tobacco sectors.
The finance minister said the government’s focus was on turning Pakistan into an export hub, particularly by promoting the IT and maritime sectors. He added that international rating agencies had recognized Pakistan’s macroeconomic stability, with corporate profits increasing by 9 percent.
Aurangzeb highlighted that the government had expanded the tax net, with 900,000 new filers added, and said digitization would bring transparency to the economy. He noted that Egypt had sought to learn from Pakistan’s FBR reforms.
He concluded that structural reforms were imperative for sustainable economic growth and that Pakistan would continue to create an ecosystem to leverage its diplomatic gains. “Google plans to develop Pakistan as an export hub, and we must build an AI-based growth ecosystem. The success of CPEC Phase-II will depend entirely on private sector financing,” Aurangzeb said.
