Finance minister says Pakistan's economy stabilized, credits Iran-US peace role as budget debate concludes

Finance Minister Muhammad Aurangzeb said Pakistan's economy has stabilized significantly over the past year, citing a stronger external account and record remittance inflows, as he wound up the general debate on the PKR 18.8 trillion federal budget for fiscal year 2026-27 in the National Assembly.

He also credited Pakistan's diplomatic efforts for helping facilitate dialogue between Iran and the United States.

What did Aurangzeb say about Pakistan's economic stabilization?

Aurangzeb told lawmakers that the country was shifting from stabilization toward sustainable, export-led growth. "Our external account is stable, and the economy is moving in the right direction," he said.

The budget sets a real GDP growth target of 4.0% and aims to bring inflation down to 8.2% for the coming year, after dropping to single digits. He pointed to record inflows from overseas Pakistanis and strong investor confidence as the primary catalysts behind the external account stability.

How much did remittances and freelance earnings contribute?

The finance minister highlighted the growing contribution of overseas Pakistanis, noting remittance inflows had reached $4.2 billion in recent months.

He projected total remittances for the current fiscal year would rise to around $41 billion by year-end, setting a new national record. Aurangzeb also praised Pakistan's digital workforce, saying freelancers generated a record $1.6 billion in earnings during the year, reflecting the growing role of IT and digital services exports in diversifying the country's foreign exchange sources.

How did Aurangzeb link the budget to regional peace efforts?

Aurangzeb said clouds of conflict had dissipated and prospects for peace had improved in the region, crediting Pakistan's diplomatic efforts in facilitating dialogue between Iran and the United States.

" Pakistan played a role in bringing Iran and the United States closer to an agreement, making peace possible," he said, adding that the country's leadership and people deserved appreciation for supporting regional stability efforts.

He also thanked opposition leader Mahmood Khan Achakzai, Senate members and parliamentary finance committee chairs for their contributions to the budget process.

What tax relief and reforms does the budget include?

Defending the government's fiscal proposals, Aurangzeb said the budget had reduced the tax burden on government employees and provided relief to the property and agriculture sectors.

The government said the budget seeks to balance fiscal consolidation with support for growth, investment and household incomes.

The budget also continues structural digitalization at the Federal Board of Revenue and focuses on easing business costs as part of the broader reform agenda.

What measures target agriculture and pensions in the new budget?

Aurangzeb said the government had allocated substantial resources to modernize Pakistan's livestock and farming sectors, expanding agricultural cooperation with China to improve productivity and technology transfer.

The government is establishing cold storage facilities nationwide for PKR 7.1 billion to reduce post-harvest losses and strengthen food supply chains.

The budget also includes a significant increase in salaries and pensions for government employees and retirees, alongside a new facial-recognition-based verification system allowing pensioners to complete verification from home.