IMF report sharpens reform focus: FinMin

Finance Minister Muhammad Aurangzeb on Sunday framed the IMF’s recent ‘Governance Diagnostic and Corruption Report’ as an opportunity to fast-track institutional reforms, insisting the assessment should be viewed as a catalyst rather than criticism of government policy.

Addressing a press conference, he said the government itself had requested and facilitated the study as part of its commitment to transparency, noting that the IMF had acknowledged progress in taxation, governance, public financial management and procurement.

While many priority reforms were already under way, he added, the remaining recommendations would be advanced to address structural weaknesses that had persisted for decades. “Institutional reform remained essential to sustaining Pakistan’s economic turnaround,” he said.

Aurangzeb stressed that structural reforms without institutional strengthening would remain incomplete. He linked this approach to the government’s broader shift toward a private-sector-driven, export-led growth model, citing the abolition of the Export Development Surcharge as a key example of this policy direction.

“The decision to end the 0.25% levy, along with overhauling the governance of the Export Development Fund, reflected the prime minister’s directive to place the private sector at the centre of economic expansion,” he said. The summary for the cabinet approval, he noted, had already been submitted and implementation would begin immediately once cleared.

The minister said recent economic indicators pointed to improving momentum, with cement output rising 16%, fertiliser 9%, petroleum 4%, automobiles 31% and mobile phone manufacturing 26% between July and October.

Large-scale manufacturing, he continued, grew 4.1% year-on-year in the first quarter, reversing last year’s contraction. He cautioned, however, that the challenge was to sustain growth without returning to boom-and-bust cycles driven by external pressures.

Aurangzeb reported that exports had grown 5%, while IT services rose more than 20% year-on-year, recording consecutive monthly highs in September and October. He described the $3.5 billion Reko Diq-related syndication — now financially closed — as a transformational investment expected to generate nearly $3 billion in annual exports once production begins.
Remittances, he said, had reached $38 billion last year and were projected to surpass $41 billion this year, strengthening the current account. “Imports were being managed under a reformed tariff regime aimed at improving competitiveness by prioritising raw materials and intermediate goods while phasing out protectionism over four to five years.”