Inflation drops to 60-year low in Pakistan, says FinMin at Harvard University

MASSACHUSETTS: Federal Minister for Finance and Revenue, Senator Mohammad Aurangzeb, while speaking at Pakistan Conference 2025 at Harvard University, highlighted the opportunities in Pakistan’s rich mineral resources.

“After inheriting an economy facing significant challenges—from contracting GDP to depleting reserves—we have stabilized the fundamentals, restored confidence, and reignited growth,” he said at the conference titled “Bridging Divides, Building Tomorrow: Pakistan’s Path to Inclusive Growth and Governance.”

The Pakistan Conference is an annual flagship event that brings together policymakers, academics, business leaders, and students to discuss Pakistan’s economic, political, and social trajectory, according to press release issued by finance ministry here Monday.

Organized by Harvard students with support from university research centers, the event is the largest student-led conference on Pakistan in the United States. The conference serves as a vital forum to advance collaborative solutions, promote global engagement, and showcase the creativity and resilience of the Pakistani people.

Aurangzeb highlighted key achievements including a historic reduction in inflation to 0.7%, the lowest in 60 years; foreign exchange reserves doubled; a 3% currency appreciation; and a current account surplus exceeding $1 billion in March 2025.

Pakistan also witnessed a 44% increase in Foreign Direct Investment (FDI), a 24% rise in IT exports, and record-high remittances projected at $38 billion. For the first time in 24 years, Pakistan achieved a fiscal surplus, with the highest primary fiscal surplus in two decades. Fitch has upgraded Pakistan’s credit sovereign credit rating to B- with a stable outlook.

Emphasizing that “stability is not an end but a means to an end, ” the Finance Minister outlined the government’s strategy including maintaining fiscal discipline, controlling inflation, and pushing ahead with deep structural reforms in energy, taxation, governance, and the management of state-owned enterprises.

He flagged major growth opportunities in Pakistan’s rich mineral resources, expanding IT sector, green energy initiatives, and the country’s youthful entrepreneurial population. Strengthening human development, he emphasized, is critical to sustaining high, inclusive growth.

On debt management, the Minister noted that Pakistan successfully reduced its public debt-to-GDP ratio from 75% to 67.2%, with a plan to bring it below 60% over the medium term through prudent fiscal management, enhanced domestic financing, and tax reforms.

Rightsizing government expenditures and privatizing loss-making state-owned enterprises are expected to save up to 2% of GDP annually, with efforts focusing on transparency, competitive processes, and investor confidence.

Discussing Pakistan’s financial sector, the Minister laid out plans to build a deeper and more resilient system by expanding digital banking, capital markets, green finance.

Highlighting the impact of climate change, the Minister reaffirmed Pakistan’s commitment to integrating resilience into infrastructure and agriculture. He singled out Resilience and Sustainability Facility (RSF) from IMF and Country Partnership Programme (CPF) approved by the World Bank as anchor for building climate resilience.

“Pakistan’s future will be shaped by bold, necessary choices. By investing in our people, modernizing our economy, and staying committed to reform, Pakistan will emerge stronger, greener, and more competitive,” concluded the Minister.