Lenders back private-sector growth

FinMin highlights fiscal, external improvements as institutions pledge further support

ISLAMABAD:

The Asian Development Bank (ADB) has reaffirmed its commitment to supporting Pakistan's development priorities, with Vice President Yingming Yang commending the country's progress in macroeconomic stabilisation and improved sovereign credit ratings during a meeting with Finance Minister Muhammad Aurangzeb, a statement from the Ministry of Finance said on Wednesday.

Yang, who leads the ADB's South, Central and West Asia operations, congratulated the government on improvements in fiscal management, the external account and overall economic stability. He described the progress as evidence of Pakistan's continued reform efforts and improved economic fundamentals.

Aurangzeb appreciated ADB's longstanding partnership and its continued support for the government's reform agenda. He highlighted the importance of institutionalising reforms in domestic resource mobilisation, public finance, energy, insurance and pensions to establish a sustainable growth trajectory.

The finance minister noted that the government's focus was now shifting from macroeconomic stabilisation towards sustainable and inclusive growth, with greater emphasis on investment, exports, employment generation and private-sector participation. He welcomed ADB's expanding engagement beyond sovereign financing, including support for private-sector operations and public-private partnerships.

Access to finance, particularly for small and medium enterprises (SMEs), was discussed as an important component of Pakistan's growth and export strategy. Aurangzeb highlighted government efforts to expand SME financing and strengthen their capacity to contribute to employment, investment and exports. The importance of integrating SMEs into global value chains and enhancing their competitiveness was also underscored.

The meeting reviewed the insurance transformation programme, public-private partnership initiatives and efforts to improve project readiness and implementation capacity.

Aurangzeb stressed the need to mobilise greater domestic and private capital, including through innovative financing structures, co-financing and stronger participation of international development and financial institutions. He highlighted the potential for expanding cooperation in infrastructure, transport, clean energy, water resource management, climate resilience and other priority areas.

Yang reaffirmed ADB's commitment to supporting Pakistan's development priorities and noted the strong alignment between the bank's strategic priorities and the government's reform agenda. He expressed readiness to further support private-sector development, SME value chain financing and other sectoral priorities.

The ADB vice president highlighted the importance of maintaining fiscal prudence while supporting Pakistan's transition towards sustainable growth. The discussion also covered pension reforms and institutional strengthening, with the finance minister appreciating ADB's continued technical support.

Deutsche Bank meeting

Separately, Aurangzeb met Deutsche Bank Regional CEO for Middle East and Africa Jamal Al Kishi to discuss Pakistan's economic outlook, investment opportunities and avenues for greater engagement by the bank.

The finance minister briefed participants on Pakistan's recent economic progress and efforts to institutionalise structural reforms and establish a sustainable, export-led growth trajectory. He highlighted improvements in the country's fiscal position, external account and overall macroeconomic stability, as well as positive validation from international rating agencies.

Al Kishi congratulated the finance minister on progress achieved over the past two years, particularly in fiscal consolidation, balance of payments, exports and remittances. He expressed confidence that these developments provided a strong foundation for more sustainable economic progress.

Aurangzeb outlined Pakistan's medium-term strategy, including efforts to manage and diversify the composition of the country's external debt and deepen engagement with international capital markets and financial institutions. He highlighted the fiscal space created through ongoing reforms and stressed the importance of expanding access to diversified sources of external financing.

The minister highlighted opportunities to attract greater investment from international and regional companies, specifically Saudi-based firms, in infrastructure, energy, oil and gas, utilities, mining and minerals, technology and blockchain, and other productive sectors. He underscored the importance of strengthening private-sector participation and facilitating greater engagement by Saudi-based multinational companies.

Al Kishi reaffirmed Deutsche Bank's long-term commitment to Pakistan and expressed interest in broadening the bank's product offering and coverage across corporate banking and investment banking. He noted interest in developing a broader appetite for Pakistani exposure and further strengthening its presence in the country.