Finance Minister Muhammad Aurangzeb has urged Pakistani businesses to reform their business and income models and improve productivity to strengthen their competitiveness in global markets, stressing the need for sustainable economic growth that also creates employment opportunities. He was addressing a leadership panel discussion titled "From Stabilisation to Growth: Pakistan's Long-Term Reform Agenda", organised by the American Business Forum (ABF) in partnership with the Lahore University of Management Sciences (LUMS) at its campus in Lahore on Saturday.
The finance czar highlighted the need for structural reforms, export growth, and greater private-sector participation in the economy. He said businesses must adapt their operating and revenue models to changing global economic conditions, adding that improving productivity was essential for competing in regional and international markets.
Aurangzeb stressed that Pakistan needed an economic growth model that generated jobs rather than focusing solely on headline growth figures. Achieving growth of 7% to 8% would not be sufficient without corresponding employment opportunities, he said.
He also highlighted the need to increase women's participation in the workforce, noting that their current participation rate stood at around 22.7%. Aurangzeb said the global economy is facing uncertainty, with international conflicts potentially affecting the prices of essential commodities.
Despite these challenges, he said Pakistan's economic recovery is continuing, and the government is working to facilitate investors. He noted that international investors are looking at markets beyond Pakistan, while European and American investors have shown interest in the country's bonds.
Pakistan issued €3 billion worth of bonds in the first week of September, he said, highlighting the country's efforts to regain access to international financial markets. The federal minister said Pakistan's credit rating had improved three times since April last year, adding that the country had restored its rating to the 'B' category after four to five years of efforts.
He said Pakistan's current International Monetary Fund (IMF) programme was scheduled to conclude in October next year. Pakistan secured a $7 billion, 37-month Extended Fund Facility (EFF) from the IMF in September 2024 to support economic stabilisation and address its external financing needs.
The latest staff-level agreement covered the fourth review of the EFF and the third review of the Resilience and Sustainability Facility (RSF). Subject to approval by the IMF Executive Board, Pakistan will receive about $1 billion under the EFF and $210 million under the RSF.
Speaking at the event, Aurangzeb said the government was continuing reforms to improve the tax system and broaden the tax base. It was also encouraging private-sector participation in economic development, he added.
The finance minister said Pakistan expected workers' remittances to reach $44 billion in the current fiscal year. Although there had been concerns that the war would reduce inflows, remittances had increased, he added.
He said freelancers accounted for around $1.6 billion of Pakistan's information technology (IT) exports, with young people exporting billions of dollars worth of IT services while working from home. The government had taken steps to promote exports, including abolishing the super tax and reducing tax slabs.