ISLAMABAD, Dec 15 (APP): Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb has said that Pakistan is no longer seeking aid-based support and is firmly transitioning towards trade- and investment-led engagement to ensure long-term economic sustainability and mutually beneficial partnerships, particularly with the Gulf Cooperation Council (GCC) countries.

In an interview with CNN Business Arabia, the Finance Minister underscored that this strategic shift, clearly articulated by the Prime Minister, reflects Pakistan’s renewed economic confidence and reform momentum.

The Finance Minister highlighted that over the past 18 months, Pakistan has remained on a comprehensive macroeconomic stabilization program, which has delivered tangible and measurable results. Inflation, which had peaked at an unprecedented 38 percent, has now declined to single-digit levels.

On the fiscal front, Pakistan has achieved primary surpluses, while the current account deficit remains well within targeted limits. He further noted that the exchange rate has stabilized and foreign exchange reserves have improved to approximately 2.5 months of import cover, reflecting strengthening external buffers.

Senator Aurangzeb pointed to two major external validations of Pakistan’s improving economic outlook. Firstly, all three international credit rating agencies have aligned their assessments this year by upgrading Pakistan’s ratings and outlook.

Secondly, Pakistan has successfully completed the second review under the IMF Extended Fund Facility, with the IMF Executive Board granting its approval earlier this week. These developments, he said, demonstrate growing international confidence in Pakistan’s economic management and reform trajectory.

The Minister emphasized that macroeconomic stabilization has been achieved through a coordinated approach combining disciplined monetary and fiscal policies with an ambitious structural reform agenda. Reforms are being implemented across key areas including taxation, energy, state-owned enterprises, public financial management, and privatization, aimed at consolidating stability and laying the foundation for sustainable growth.

On taxation, Senator Aurangzeb noted significant progress in improving Pakistan’s tax-to-GDP ratio, which stood at 8.8 percent at the start of the reform program. During the last fiscal year, it increased to 10.3 percent, with a clear path towards 11 percent.

He explained that the government’s objective is to reach a level of tax collection that ensures fiscal sustainability over the medium to long term. This is being pursued through widening the tax base by bringing previously undertaxed but economically significant sectors such as real estate, agriculture, and wholesale and retail trade into the formal net, alongside deepening compliance by reducing leakages through production monitoring systems and AI-enabled technologies. Simultaneously, the tax administration is being transformed through reforms in people, processes, and technology.

In the energy sector, the Finance Minister highlighted efforts to improve governance in distribution companies, involve private sector expertise, advance privatization, and reduce circular debt, which has long constrained the power sector. He stressed that rationalizing the tariff regime is essential to making energy more competitive for industry, thereby enabling industrial revival and economic growth.

Senator Aurangzeb acknowledged the longstanding support of GCC countries, including Saudi Arabia, the United Arab Emirates, and Qatar, noting their critical role in supporting Pakistan through financing, funding, and cooperation at international financial institutions such as the IMF.

He said this relationship is now evolving towards a new phase centered on trade expansion and investment flows. Remittances continue to play a vital role in supporting the current account, with inflows reaching approximately USD 38 billion last year and projected to rise to USD 41-42 billion this year, over half of which originate from GCC countries.

Looking ahead, the Finance Minister stated that Pakistan is actively engaging with GCC partners to attract investment in priority sectors including energy, oil and gas, minerals and mining, artificial intelligence, digital infrastructure, pharmaceuticals, and agriculture.

He also expressed optimism regarding progress on a Free Trade Agreement with the GCC, noting that discussions are at an advanced stage.

Reiterating the government’s strategic direction, Senator Aurangzeb said that Pakistan’s future lies in fostering trade and investment partnerships rather than reliance on aid. He emphasized that foreign direct investment into productive sectors will support higher GDP growth, generate employment opportunities, and deliver shared economic benefits for Pakistan and its partners. He concluded by stressing that the government is fully mobilized to translate this vision into reality.