KARACHI – Finance Minister of Pakistan’s Muhammad Aurangzeb addressed World Economic Forum (WEF) in Switzerland, presenting Islamabad’s positive strides in improving tax-to-GDP and debt-to-GDP ratios.
Sharing his views in a panel discussion on debt sustainability, the country’s finance chief acknowledged South Asian nation is on the right track to addressing its economic issues while challenges exist. He pointed out that the government is focused on increasing the tax-to-GDP ratio from the current 9-10% to 13.5%, through structural reforms.
Aurngzeb underscored efforts to reduce government expenditures and manage the growing debt burden more efficiently. He highlighted a significant improvement in Pakistan’s debt-to-GDP ratio, which has decreased from 78% to 67%. However, he cautioned that further work is needed, while remaining optimistic about the country’s progress.
Minister touched on Pakistan’s borrowing practices, asserting that borrowing is not inherently problematic, as long as loans are used for boosting productivity and exports, rather than funding subsidies or daily expenses.
Pakistan’s growth has been inconsistent, with periods of foreign exchange shortages and balance of payment issues. These issues often lead to reliance on the International Monetary Fund (IMF) for financial assistance. However, he stressed that for Pakistan to achieve sustainable growth, it must pivot towards an export-led economy.
Aurangzeb’s comments at the WEF reflect the government’s ongoing efforts to stabilize and reform Pakistan’s economy, with a focus on long-term sustainability.
