FinMin seeks global investment in Pakistan’s key sectors

Finance Minister Muhammad Aurangzeb invited global stakeholders to invest in Pakistan’s agriculture, Information Technology (IT), renewable energy and pharma sectors.

The finance minister in an article published on the World Economic Forum (WEF) official website highlighted the transformative journey embarked upon by Pakistan in recent years towards economic stabilization and growth.

He said Pakistan’s economy is on a path to recovery. Inflation has dropped to 4.1 percent and foreign exchange reserves now provide over two months of import coverage.

Muhammad Aurangzeb said exports have risen by 7.1 percent, while the IT sector grew by an impressive 28 percent year-on-year.

The article said Pakistan’s global default risk has dropped by 93 percent, signaling renewed faith in the country’s fiscal stability.

Highlighting Pakistan’s potential as a lucrative investment hub, the Minister said local and foreign investors, including global giants like Aramco, BYD and Samsung, are contributing to this economic revival.

Muhammad Aurangzaib said the current account has been in surplus for three consecutive months, and investor confidence is at a two-year high. He said foreign direct investment surged by 20 percent in the first half of the current fiscal year, reflecting renewed trust in Pakistan’s economic trajectory.

The finance minister said initiatives like the Roshan Digital Account have attracted over nine billion dollars in inflows, while remittances reached a record 35 billion dollars this year. He said Pakistan’s equity market delivered an 87 percent return in dollar terms, underscoring strong investor sentiment.

“In July 2024, we introduced a reform-oriented budget with an ambitious goal of raising Rs13 trillion in revenue – a 40% increase from the previous year. These reforms focused on broadening the tax base by targeting under-taxed sectors like agriculture, real estate and trade, while leveraging technology to enhance compliance and transparency. Modernizing the Federal Board of Revenue (FBR) has been instrumental in streamlining tax administration.”

Challenges remain

“Despite significant achievements, challenges remain. To break free from cycles of external assistance, Pakistan is addressing structural inefficiencies in revenue collection, energy, state-owned enterprises (SOEs) and privatization. Rightsizing the federal government, reforming SOEs, and fostering export-led growth will strengthen internal revenue streams and reduce reliance on international funding programmes,” the finance minister added.

Muhammad Aurangzaib said in his article, “Global stakeholders are invited to support Pakistan’s journey by investing in priority sectors such as agriculture, IT, renewable energy, mining and minerals, textiles and apparels, pharmaceuticals, while capitalizing on Special Economic Zones (SEZs). Pakistan’s innovative approaches in taxation and economic stabilization offer valuable lessons for other developing economies. Furthermore, partnerships in climate resilience and sustainable development are crucial for advancing shared global goals.”