Aurangzeb defends GDP figures, calls for national consensus to sustain economic recovery

ISLAMABAD, Jun 20 (APP): Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb on Saturday rejected concerns over Pakistan’s GDP calculations and economic data, asserting that all national accounts are compiled under internationally recognized standards.

He also emphasized that national consensus remained essential to sustaining economic recovery and reform momentum.

Winding up the general debate on the Federal Budget 2026–27 in the National Assembly, he said the government had presented a “balanced, growth-oriented and stability-focused budget,” under the leadership of Prime Minister Muhammad Shehbaz Sharif, with key macroeconomic indicators showing significant improvement over the past year.

Responding to concerns raised by some lawmakers regarding alleged discrepancies in budget documents and national income statistics, the finance minister categorically rejected the allegations and clarified that there had been no change in the methodology used for calculating Gross Domestic Product (GDP), per capita income, or other national accounts aggregates.

He said the Pakistan Bureau of Statistics (PBS) continues to compile national accounts under the United Nations System of National Accounts (SNA 2008), using 2015–16 as the base year. He added that GDP growth of 3.7 percent reflects real economic activity measured at constant prices in line with international practice.

Aurangzeb said national accounts are approved by the National Accounts Committee, which includes representatives from federal and provincial governments, the State Bank of Pakistan, academia and other relevant institutions.

He said that nominal GDP was calculated at current market prices and converted into US dollars using average exchange rates, with Pakistan’s economy estimated at around $452 billion in FY2025–26. He added that per capita income was based on gross national income and population estimates derived from the 2023 census.

The finance minister said Pakistan had recently played a constructive diplomatic role in facilitating dialogue between the United States and Iran, helping reduce tensions and prevent escalation, which he said was a matter of national pride.

Highlighting economic performance, the minister said that Large-Scale Manufacturing (LSM) had grown by around 6.5 percent, the highest in four years, while the current account remained in surplus for the 11th consecutive month.

He noted record monthly remittances of $4.25 billion and expressed confidence that total remittances could exceed $41 billion during the current fiscal year. He said IT exports had grown by about 20 percent and were expected to cross $4.5 billion, while freelancers had contributed $1.6 billion in foreign exchange earnings.

Aurangzeb said the government’s strategy focuses on export-led, sustainable and inclusive growth aimed at increasing productivity and generating employment opportunities.

He said tax reforms were designed to broaden the tax base rather than increase the burden on existing taxpayers, adding that relief had been provided to salaried individuals, small businesses, industry, exporters and the construction sector.

The minister said reforms included separation of tax policy from administration and the introduction of a modern, digital tax operating model to reduce direct interaction between taxpayers and officials. He said automation, artificial intelligence and faceless systems would enhance transparency and reduce harassment.

He said Pakistan had generated around $14 billion in additional tax revenue over the past two years, crediting reforms and leadership under Prime Minister Shehbaz Sharif.

On agriculture, Aurangzeb said Rs300 billion in interest-free loans had been provided under the “Zarkhez” programme for small farmers, benefiting around 750,000 farmers. He said subsidies and financing had also been extended for fertilisers, machinery, insurance and cold storage projects.

He said cooperation with China was expanding, with more than 800 Pakistani students, farmers and agricultural graduates already trained in modern farming techniques.

The finance minister said the government was also promoting affordable housing through the “Apna Ghar” programme to stimulate construction activity and job creation.

He said relief measures included increases in salaries, pensions and minimum wages, along with digital facilitation for pensioners through facial recognition-based life verification using the Pak-ID app.

Aurangzeb said taxes had been reduced or abolished on essential health items, including contraceptives and life-saving medicines, to improve access to healthcare.

Paying tribute to parliamentary committees, coalition partners, opposition members, business community representatives and media stakeholders, he said their input had helped improve the budget.

He appreciated the Speaker of the National Assembly for fiscal discipline measures that resulted in savings of around Rs5 billion.

Concluding his remarks, the finance minister said that national consensus remained vital for sustaining economic recovery and urged all stakeholders to continue supporting reforms aimed at ensuring long-term stability and prosperity.