Finance Minister Muhammad Aurangzeb has ruled out a return to consumption-driven economic growth, saying Pakistan will focus on sustainable, export-led expansion as fiscal consolidation and tax reforms help stabilise the economy.<\/p>\n\n\n\n
\u201cWe will not let that repeat,\u201d Aurangzeb said on Tuesday, referring to past boom-and-bust cycles fuelled by liquidity and consumption.<\/p>\n\n\n\n
Addressing a workshop on tax system reforms organised by the Ministry of Finance on Tuesday, he said Pakistan\u2019s combined fiscal and external deficit had declined from 12.5% of gross domestic product (GDP) a few years ago to 2.6% at the close of the last fiscal year. Pakistan\u2019s economic growth slowed to two per cent in the fourth quarter of FY26<\/a>, down from 6.07% in the same period a year earlier, with a sharp contraction in industry weighing on overall performance, according to the Pakistan Bureau of Statistics (PBS).<\/p>\n\n\n\n The finance minister said the country had recorded its lowest fiscal deficit in 22 years and achieved three consecutive years of primary budget surpluses.<\/p>\n\n\n\n \u201cA big part of this has been fiscal consolidation,\u201d he said, crediting improved revenue collection and enforcement measures for the progress.<\/p>\n\n\n\n Aurangzeb said the Federal Board of Revenue\u2019s (FBR) tax-to-GDP ratio had increased from 8.8% to 10.3%, while revenues had risen by 40% over the past two fiscal years.<\/p>\n\n\n\n He said 0.9 percentage points of the 1.5-percentage-point increase in the tax-to-GDP ratio over the past two to two-and-a-half years came from enforcement, while 0.6 percentage points resulted from new policy measures.<\/p>\n\n\n\n \u201cEnforcement simply means we have stopped leakage, we have stopped theft, we have stopped corruption,\u201d he said.<\/p>\n\n\n\n Aurangzeb said the government would strengthen enforcement further while expanding the tax base and simplifying the taxation system.<\/p>\n\n\n\n He also highlighted the FBR\u2019s transformation programme, covering staffing, processes and technology, which he said was being overseen by Prime Minister Shehbaz Sharif through weekly reviews.<\/p>\n\n\n\n Tax reforms remain a key part of the government\u2019s broader structural reform agenda, alongside changes in the energy sector, state-owned enterprises, privatisation, public finances, pensions and tariffs.<\/p>\n\n\n\n Aurangzeb said Pakistan had made progress since its economy contracted, with growth recovering to around 3.7%. However, he stressed that sustainable expansion mattered more than the headline growth rate.<\/p>\n\n\n\n \u201cIt not only has to be growth, it has to be sustainable growth,\u201d he said, warning that consumption-led expansion had contributed to economic instability in the past.<\/p>\n\n\n\n The finance minister said tax policy should be guided by economic value rather than designed primarily to meet revenue targets.<\/p>\n\n\n\n \u201cWe have to continue to have a tax design which is led by economic value considerations, not by making the math work,\u201d he said.<\/p>\n\n\n\n He added that recent budget measures had recalibrated taxation for exports and export-oriented industries, and called for further reforms to broaden the tax base and simplify tax laws.<\/p>\n\n\n\n Aurangzeb also stressed the need for predictable policies to encourage private investment.<\/p>\n\n\n\n \u201cWe cannot continue to give surprises to private sector investment at every single budget,\u201d he said, calling for policy continuity and stability.<\/p>\n\n\n\n He identified political consensus, stronger institutions, taxpayer trust and clearer communication as key requirements for successful reform.<\/p>\n\n\n\n Aurangzeb said Pakistan\u2019s foreign exchange reserves had recovered from a level equivalent to around two weeks of import cover to more than three months.<\/p>\n\n\n\n He argued that the quality of reserves was as important as their size, saying the improvement had not been built on the same scale of external borrowing seen in earlier years.<\/p>\n\n\n\n According to the finance minister, Pakistan\u2019s external debt stock had increased by around $4 billion over the past four years, compared with annual increases of $6 billion to $7 billion between 2015 and 2022.<\/p>\n\n\n\n \u201cThe important thing is not only the quantum of these reserves but the quality of these reserves,\u201d he said.<\/p>\n\n\n\n Aurangzeb said the workshop would review progress on structural reforms and identify further measures to help Pakistan move from economic stabilisation towards sustainable growth.<\/p>\n\n\n\n PAK SOUCH MEDIA GROUP<\/p>\n\n\n\n Daily Pak Souch Newspaper Sukkur \u2013 Daily Pak Special Newspaper Karachi \u2013 Daily Pak Today Newspaper Karachi – Daily Pak Jazbo Newspaper Sukkur<\/p>\n\n\n\n Head Office : Ayub Gate Shaikh Muhalla Near Rabbania Masjid Sukkur<\/p>\n\n\n\n Karachi Office : Office No. 1901-B, 19th Floor Saima Trade Tower (B) Block I.I Chandigarh Road Near Jung Press, Shaheen Complex & National Museum of Pakistan Karachi Sindh Pakistan.<\/p>\n\n\n\n Contact : 03009319022<\/p>\n\n\n\n Website 1 : https:\/\/paksouch.com\/<\/a> Finance Minister Muhammad Aurangzeb has ruled out a return to consumption-driven economic growth, saying Pakistan will focus on sustainable, export-led expansion as fiscal consolidation and..<\/p>\n","protected":false},"author":1,"featured_media":18055,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-18054","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pakistan"],"featured_image_urls":{"full":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/10\/Pak-Souch-Social-Media-Poster-44-2.png",800,947,false],"thumbnail":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/10\/Pak-Souch-Social-Media-Poster-44-2-150x150.png",150,150,true],"medium":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/10\/Pak-Souch-Social-Media-Poster-44-2-253x300.png",253,300,true],"medium_large":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/10\/Pak-Souch-Social-Media-Poster-44-2-768x909.png",768,909,true],"large":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/10\/Pak-Souch-Social-Media-Poster-44-2.png",800,947,false],"1536x1536":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/10\/Pak-Souch-Social-Media-Poster-44-2.png",800,947,false],"2048x2048":["https:\/\/paksouch.com\/wp-content\/uploads\/2026\/10\/Pak-Souch-Social-Media-Poster-44-2.png",800,947,false]},"author_info":{"info":["admin"]},"category_info":"Pakistan<\/a>","tag_info":"Pakistan","comment_count":"0","_links":{"self":[{"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/posts\/18054","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=18054"}],"version-history":[{"count":1,"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/posts\/18054\/revisions"}],"predecessor-version":[{"id":18056,"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/posts\/18054\/revisions\/18056"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=\/wp\/v2\/media\/18055"}],"wp:attachment":[{"href":"https:\/\/paksouch.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=18054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=18054"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/paksouch.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=18054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Tax-to-GDP ratio rises to 10.3%<\/h4>\n\n\n\n
Government prioritises export-led growth<\/h4>\n\n\n\n
Reserves improve as Pakistan pursues stability<\/h4>\n\n\n\n
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