Pakistan’s Finance Minister Engages Moody’s on Macroeconomic Progress and Reform Agenda
Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, along with Minister of State for Finance Bilal Azhar Kayani, Governor of the State Bank of Pakistan, and senior officials from key finance and revenue departments, held a virtual meeting with Moody’s Rating Agency at the Finance Division.
The session focused on providing Moody’s with a detailed update on Pakistan’s macroeconomic outlook, reform initiatives, and financial stability efforts.
Key Highlights from the Meeting
Minister Aurangzeb highlighted Pakistan’s significant progress in stabilizing its economy and setting the stage for sustainable growth. He pointed to the successful completion of the final IMF review under the Stand-By Arrangement, including the second tranche disbursement and ongoing developments under the Resilience and Sustainability Facility (RSF) as major confidence boosters.
The Minister also outlined key structural reforms aimed at ensuring long-term stability:
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Prudent fiscal policies reflected in the latest budget
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Tariff and trade liberalization focused on export-led growth
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Rationalization of government expenditure
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Positive developments in trade talks with the United States regarding preferential tariff access
Re-engagement with Global Financial Markets
Pakistan’s efforts to reconnect with international markets were a central topic, including:
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A recent $1 billion commercial financing deal from the Middle East
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Plans for an inaugural Panda bond
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Intentions to explore Eurobond issuance and other international debt opportunities as credit ratings improve
Macroeconomic Recovery Indicators
The Finance Minister presented evidence of economic recovery, such as:
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Significant reduction in inflation
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Policy rate cuts
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Exchange rate stabilization
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Current account surplus
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Foreign exchange reserves exceeding $14 billion as of June-end
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Strong remittance inflows and improved export performance
Focus on Tax Reforms and Revenue Growth
The briefing emphasized ongoing reforms to boost the tax-to-GDP ratio through:
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Technology-driven tax administration improvements
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Digitization of tax systems
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Strengthened enforcement measures
Minister Aurangzeb noted the government’s commitment to expanding the tax base, plugging revenue leakages, and enhancing compliance, aiming to raise the tax-to-GDP ratio to 13–13.5% in the coming years.
Commitment to Continued Reform and Stability
Addressing Moody’s questions, the Finance Minister reaffirmed Pakistan’s dedication to macroeconomic reforms, including privatization, restructuring state-owned enterprises, and optimizing government size.
Looking ahead, Senator Aurangzeb expressed optimism that the improving economic indicators and reform efforts would be positively recognized by rating agencies, strengthening Pakistan’s position in international markets and supporting external sector stability.
He concluded by stating Pakistan’s readiness to continue its path of resilience, reform, and inclusive economic growth for a sustainable future.
