Pakistan’s current account is expected to remain in surplus throughout the fiscal year 2024–25, Finance Minister Muhammad Aurangzeb said, diverging slightly from the central bank’s more cautious projection.
Speaking at a pre-budget seminar hosted by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Karachi, Aurangzeb said the government’s outlook remains optimistic despite the State Bank of Pakistan’s (SBP) estimate of a possible 0.5% deficit or surplus for FY25.
He added that the country’s tax-to-GDP ratio was projected to rise to 10.6% this fiscal year, with plans to increase it further to 13.5% over the next three years through ongoing tax reforms.
“This will be the last IMF programme for Pakistan,” Aurangzeb said, stressing the government’s commitment to structural fiscal reforms.
He said the government would prioritise tax relief for businesses and salaried individuals “where possible,” while continuing to support economic activity in FY26.
The minister noted that the budget for FY26 was being shaped with input from independent analysts and aligned with global best practices.
“Every sector must pay its share of taxes to ease the burden on the salaried class and manufacturing industry,” he said, acknowledging that the IMF programme may restrict fiscal flexibility in the near term.
Aurangzeb identified high taxation, elevated energy costs, and expensive financing as key hurdles facing the economy.
He noted that financial costs have eased following the central bank’s 10-point policy rate cut since June 2024, bringing the rate down to 12%, and making it more viable for businesses to access credit.
“We are headed in the right direction, but there is more to be done,” he said, adding that the government was reviewing further areas for tax relief.
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