Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb announced on Tuesday that Pakistan's current account performance remains robust, driven by record remittance inflows. He projected that total remittances for the current fiscal year would reach between $41 billion and $42 billion.
Strong Economic Indicators
Addressing the second edition of the Pakistan Banking Summit 2026 at a local hotel in Karachi, Aurangzeb highlighted that the last fiscal year ended on a strong note across all metrics. He cited a primary surplus, an all-time low fiscal deficit, a debt-to-GDP ratio well below 70 percent, and GDP growth closing at 3.7 percent, supported by a strong rebound in Large-Scale Manufacturing (LSM).
The minister acknowledged a dip in exports but noted that the decline is concentrated in the food sector, while value-added textile exports have continued to register year-on-year growth.
Foreign Exchange and Capital Markets
Aurangzeb expressed confidence that foreign exchange reserves would close at approximately $18.4 billion for the fiscal year, exceeding earlier estimates. He also discussed the issuance of Eurobonds and highlighted the significance of the Panda Bond, noting that Pakistan had missed opportunities to tap into the world's second-largest capital market for seven to eight years.
Regarding the Pakistan Stock Exchange (PSX), he emphasized that activity drivers are more important than index numbers. He pointed to a growing number of investors, particularly Gen Z, and a return to double-digit corporate profitability.
Budget and Tax Reforms
Referring to the current year's budget, Aurangzeb noted that for the first time, the Tax Policy Office led the budget process, having been moved to the Finance Division. He stated, 'We focused on export-led growth, removing the advance tax, removing the super tax, low-cost subsidized financing, and continuing with the tariff regime.' He thanked the Prime Minister and the Cabinet for their support and announced plans to introduce a medium-term tax strategy.
The minister also revealed that Parliament has approved a new tax administration operating model, which minimizes human intervention. 'It is a very fundamental change because this is a model which is AI and technology led and notices will be issued by it,' he said.
Banking Sector and Privatization
Aurangzeb stressed that access to finance and the banking industry remain critical for Pakistan's transition from stabilization to sustainable growth. He identified increased lending to SMEs, exporters, agriculture, manufacturing, construction, and IT industries as mission-critical priorities.
'I think we have moved in the right direction, but there’s a long, long way to go,' he added. On privatization, he confirmed that Pakistan International Airlines (PIA) is now in private hands, roadshows for three distribution companies (discos) are complete, and 28 institutions have been handed over to the Privatization Commission. He also lauded the Pakistan Banks' Association (PBA) and sought suggestions from the summit.
