Privatization Process and Financial System Improvement Are the Need of the Hour: Muhammad Aurangzeb
Pakistan’s Economic Stability Has Improved – The Government is Committed to the Economic Reforms Agenda and Will Not Back Down, Says Finance Minister at Pakistan Banking Summit 2025, Media Briefing
ISLAMABAD ( Web News )
Federal Minister for Finance, Muhammad Aurangzeb, stated that the government should provide policies to the private sector to ensure more efficient business operations. He emphasized that privatization and financial system improvement are critical needs of the time.
The first Pakistan Banking Summit 2025, organized by the Pakistan Banks Association, was attended by Finance Minister Muhammad Aurangzeb, bank presidents, and foreign delegates. Addressing the summit, the Finance Minister highlighted that emerging markets have made remarkable progress over the past 25 years, and it is now time for Pakistan to fully focus on utilizing its available resources.
He noted that most finance ministers have prioritized production growth and that the government must provide the necessary policies for the private sector to operate effectively. He also stressed the need for accelerating the privatization process and financial system improvements.
Muhammad Aurangzeb shared that he and the Governor of the State Bank recently attended a global conference in Saudi Arabia, where they learned that finance ministers from emerging economies are emphasizing deregulation and eliminating bureaucratic red tape. He further stated that Pakistan must focus on trade policies with regional countries to achieve economic stability.
The Finance Minister highlighted that Pakistan’s economic stability has improved, with both internal and external accounts recording positive changes. In the first seven months of the 2025 fiscal year, the current account remained in surplus, inflation and interest rates declined, and structural reforms are being implemented—particularly the complete digitization of the Federal Board of Revenue (FBR). He added that introducing faceless assessments has resulted in a 90% reduction in corruption.
He described the implementation of agricultural income tax as a major structural reform, stating that provincial finance ministers will assess the progress of agricultural reforms. Additionally, he mentioned that an advisory board at the policy level is under consideration and that the government is working to reduce unnecessary panic regarding the upcoming budget.
The Finance Minister announced that the privatization process for three DISCOs (electricity distribution companies) will soon commence, with various measures being taken to cut government expenses. He emphasized that the government is focusing more on the “how” rather than the “why” and is working to reduce financial losses through pension reforms.
He asserted that sustainable economic development is not possible without addressing issues such as population growth and climate change. To this end, the government has formulated a ten-year partnership plan with six key themes—four related to climate change and two concerning financial matters.
Muhammad Aurangzeb stressed the need to enhance export production, urging diversification beyond textiles to include other sectors. He also emphasized improving production efficiency to achieve global competitiveness. He stated that an increase in domestic investment will attract foreign investors to Pakistan. Speaking about global capital markets, he expressed optimism about Pakistan’s improved ranking, suggesting that the country could soon attain a single-D category rating.
The Finance Minister remarked that State Bank inflows have shown positive progress and that mid-sized banks are performing well in the SME sector. He instructed large banks to play a role in SME financing, assuring that the Finance Ministry would provide full support in this regard.
He acknowledged that digitization in FBR has reduced human intervention, though it cannot be completely eliminated. Efforts are ongoing, in collaboration with the Small and Medium Enterprises Development Authority (SMEDA), to enhance operational efficiency.
Media Briefing
Speaking to the media afterward, Muhammad Aurangzeb stated that the government is taking effective measures to combat tax evasion and corruption. He revealed that an IMF technical mission has arrived in Pakistan to review climate financing issues over three days. Additionally, next month, a second IMF team will visit for negotiations on a bailout package.
The Finance Minister announced that the privatization of Pakistan International Airlines (PIA) is expected to be completed this year, and the government is fully committed to making the process successful. He also highlighted strengthening trade ties with Azerbaijan and Türkiye, emphasizing that Pakistan is working to establish a strong economic presence in the region.
Regarding trade with India, he described it as a geopolitical issue, stating that the government is evaluating the matter based on prevailing circumstances. He reiterated that the government will promote exports and ensure strict border surveillance to eliminate smuggling.
Muhammad Aurangzeb reaffirmed that the government remains steadfast in its economic reform agenda and will not retreat from its policies. He emphasized that FBR reforms will continue with the same determination and that the tax base will be expanded while eliminating corruption entirely.
He pointed out the immense potential in mineral exports, stating that the government is taking steps to develop this sector. He concluded by asserting that sustainable growth is not possible without broadening the tax base and expressed optimism that Pakistan’s economy will stabilize, enhancing the country’s global reputation in the future.