Finance Minister Muhammad Aurangzeb on Wednesday expressed optimism about Pakistan’s economic trajectory, citing a sharp increase in foreign exchange reserves, a current account surplus after a decade, and falling inflation as key positive indicators.
Addressing the Economic Coordination Committee (ECC), Aurangzeb noted that foreign reserves, which once barely covered two weeks of imports, have now increased to 2.6 months. “We are confident that by the end of this fiscal year, reserves will reach 3 months of import cover,” he said, calling it a critical signal for international rating agencies.
The minister highlighted a 35% year-on-year surge in remittances, projecting them to hit $35 billion by June 2025. Additionally, Roshan Digital Account (RDA) inflows have crossed $9 billion, reflecting sustained confidence from overseas Pakistanis.
Aurangzeb pointed to declining inflation, which dropped to 4.9% in November, the lowest in over six years. He attributed this to prudent fiscal management and monetary adjustments, including the State Bank of Pakistan’s recent policy rate cut to 13%, its fifth consecutive reduction since June 2024.
Lower borrowing costs are benefiting industries, with key lending benchmarks like KIBOR dropping below 12%, he added. “Debt servicing costs for large businesses have been cut in half, which will help industrial growth.”
Reiterating the importance of macroeconomic stability, Aurangzeb said it is the foundation for sustainable growth. “We are witnessing growing investor confidence, and this momentum must carry forward to unlock Pakistan’s economic potential,” he concluded.
