Prime Minister Muhammad Shehbaz Sharif on Wednesday launched the government’s Economic Governance Reforms, saying Pakistan had moved out of a prolonged economic crisis phase following two years of fiscal adjustment and stabilisation measures.
Speaking at the ceremony, the prime minister said inflation had declined sharply to 4.5 per cent from nearly 30 per cent in early 2024, while foreign exchange reserves increased to around $21 billion from $9.2 billion. He said the current account position improved from a $3.3 billion deficit to a $1.9 billion surplus.
Shehbaz Sharif said the government inherited an economy under severe stress, with depleted reserves, weak institutions and limited access to global financial markets. He said the scale of the crisis required politically difficult decisions, including the withdrawal of unsustainable subsidies and the restoration of fiscal discipline.
He said Pakistan shifted from a primary deficit to a primary surplus and narrowed its overall fiscal deficit as part of the stabilisation effort. Public financial management was strengthened and long-delayed privatisation reforms were initiated, he added.
The prime minister said revenue reforms led to a rise in the tax-to-GDP ratio from around 8 per cent to over 10 per cent, with more than one million new taxpayers added. Tax collection grew by 26 per cent in 2025, supported by digitisation across government departments.
He said the e-procurement platform ePADS now covers more than 1,000 federal entities and over 500,000 contracts, with real-time integration with the Federal Board of Revenue, NADRA and the Securities and Exchange Commission of Pakistan.
Shehbaz Sharif said the privatisation of Pakistan International Airlines and First Women Bank marked a break from past delays, with additional state-owned enterprise reforms in progress. He said Pakistan’s stabilisation efforts had been acknowledged by international credit rating agencies and development partners.
With macroeconomic indicators stabilised, the prime minister said the government’s focus would now shift towards growth, export expansion and improving the ease of doing business.
He said the Economic Governance Reforms framework comprised 142 actions, including 59 priority reforms and 83 supporting measures, to be implemented by 58 institutions within defined timelines. Key sectors include taxation, energy, privatisation, pensions, state-owned enterprises, tariff rationalisation, regulatory simplification, rightsizing of the federal government and digital governance.
Earlier, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said economic growth reached 3.1 per cent in FY25 and accelerated to 3.71 per cent in the first quarter of FY26, while inflation remained around 5 per cent during the first five months of FY26.
He said fiscal discipline was maintained through consecutive primary surpluses, including a surplus of 2.7 per cent of GDP. The tax-to-GDP ratio rose to 10.2 per cent in FY25, the highest in 25 years, he added.
The finance minister said public debt declined to about 70 per cent of GDP from 75 per cent in FY23, while early repayments generated interest savings of Rs3.5 trillion. He said the policy rate was reduced to 10.5 per cent from 22 per cent in June 2024.
On the external front, Senator Aurangzeb said State Bank reserves reached $15.9 billion, a four-year high, while import cover improved to 2.6 months. The current account deficit stood at $812 million in the first five months of FY26, within programme targets.
He said remittances totalled $38 billion in FY25, Roshan Digital Account inflows reached $11.5 billion, and investor confidence was reflected in a stable exchange rate, rising private sector credit, a 52 per cent gain in the Pakistan Stock Exchange in dollar terms during 2025, increased IPO activity and near-complete digitalisation of company registrations.
