Aurangzeb assures IMF officials of govt commitment to fiscal discipline, reforms

Pakistan’s finance minister has reassured the International Monetary Fund (IMF) that the government is committed to fiscal discipline, structural reforms, and macroeconomic stability as agreed with the lending agency for the loan program.

Federal Minister for Finance and Revenue Muhammad Aurangzeb held talks with the visiting IMF mission to start the third review of Pakistan’s Extended Fund Facility arrangement and the second review of the Resilience and Sustainability Facility.

Aurangzeb said that since the successful completion of the previous review, Pakistan has continued consolidating the gains in macroeconomic stability achieved under the IMF-supported programs.

He described the progress as the result of sustained and difficult reforms and underscored the government’s resolve to maintain fiscal discipline and safeguard macroeconomic stability.

Structural reforms — particularly in taxation and the energy sector — remain central to the government’s agenda, he said.

Aurangzeb highlighted comprehensive transformation efforts in tax administration, including improvements in people, processes and technology, undertaken with strong leadership at the highest level.

He said steps have been taken to fully operationalize the Tax Policy Office to ensure future taxation policy is guided by economic principles aimed at supporting sustainable growth.

On privatization and state-owned enterprise reforms, the minister reaffirmed the government’s commitment to advancing key transactions and restructuring initiatives during the year. He said recent developments point to growing investor confidence and renewed appetite among domestic investors, reflecting trust in the economy’s direction and reform trajectory. The privatization and restructuring process would continue in a transparent and orderly manner, he added.

Aurangzeb also outlined progress on right-sizing the federal government, including the merger of ministries and the closure of certain entities, as part of broader public sector reforms to improve efficiency and governance.

He reiterated the government’s commitment to an export-led growth strategy, supported by trade facilitation measures and tariff rationalization to enhance competitiveness and reduce import dependency over time.

The minister briefed the IMF mission on the government’s response to flood-related challenges during the fiscal year, saying the availability of fiscal buffers enabled timely rescue and relief efforts. Maintaining macroeconomic stability has strengthened the country’s resilience to external and climate-related shocks, he said.

On economic performance, Aurangzeb said recent indicators suggest a gradual recovery, with positive trends in growth and key sectors. However, he acknowledged emerging global headwinds, including evolving geopolitical developments and volatility in international energy markets, which pose potential risks.

He said a high-level committee has been constituted to closely monitor the evolving situation and ensure coordinated policy responses.

While stabilization efforts were necessary to restore macroeconomic balance, the government remains mindful of the social impact and will continue policies aimed at enhancing social spending to protect vulnerable populations, he said.

Petrova thanked the minister for the comprehensive briefing and shared insights from the mission’s discussions with authorities in Karachi regarding ongoing reviews under the Extended Fund Facility and the Resilience and Sustainability Facility. Both sides agreed to continue discussions virtually in the coming days.

The meeting was attended by State Bank of Pakistan Governor Jameel Ahmad, the finance secretary, the chairman of the Federal Board of Revenue and senior officials of the Finance Division.