Unveiling the Pakistan Economic Survey 2024-25 on Monday, Finance Minister Muhammad Aurangzeb suggested delinking the National Finance Commission (NFC) Award from population figures, emphasizing that the country’s 2.5% population growth is an “existential” problem.
Addressing a press conference in Islamabad along with Secretary Finance Imdadullah Bosal, Chief Economist Dr. Imtiaz and Economic Adviser Raja Hasan, he suggested the current framework of the NFC Award incentivized provinces to boost populations to secure larger shares.
“I am not in favor to raise slogans about giving five or ten million jobs,” he said, emphasizing the government’s job is to provide an enabling ecosystem, not create employment. He also warned of ongoing fiscal challenges, particularly in energy and taxation sectors. “We must stop the bleeding or leakages in the energy and other sectors,” he said.
Stressing “economic security is a critical pillar of national security,” Aurangzeb praised the armed forces for their performance during a conflict with India last month. “The Pakistan military has proven its strength to the world in a recent conflict with India, but our battle on the economic front continues,” he said, maintaining the costs of the recent conflict were fully absorbed within the current fiscal year’s budget, without requiring additional allocations.
The finance minister confirmed that India’s executive director had attempted to obstruct Pakistan’s case before the IMF Board, but international support had helped Islamabad secure the next tranche of the ongoing $7 billion bailout. “Despite resistance, global financial institutions including Fitch, Moody’s and IFCs remain engaged with Pakistan and acknowledge our reforms,” he said.
On revised unemployment data issued by the World Bank, which has raised the poverty threshold from $2.1 to $3/day, potentially pushing millions of Pakistanis below the poverty line, Aurangzeb said he would need to examine the methodological change in the employment threshold. “Before drawing conclusions, we must understand the new benchmark they’ve applied,” he said.
The minister claimed the government has implemented strict expenditure controls as part of rightsizing measures. “There is no further room for cuts; we’ve already minimized spending to the limit,” he said, noting the country’s fiscal deficit in 2024 has significantly decreased compared to 2022.
Aurangzeb also highlighted improvements in key macroeconomic indicators and emphasized the government’s commitment to structural reforms. He said Pakistan is moving towards economic stability, with GDP growth recorded at 2.7% during the current fiscal year and inflation falling to 4.6%, a significant decline from the high levels seen in recent years.
“The country is heading in the right direction,” he maintained. “We are seeing early signs of recovery across several sectors, driven by policy consistency and fiscal discipline,” he said, noting the decline of the policy rate from 22% to 11% had helped ease borrowing costs for businesses and consumers. He further credited the IMF’s Stand-By Arrangement for boosting investor confidence. “The IMF’s support has been instrumental in stabilizing our macroeconomic fundamentals, despite opposition from some quarters, including an Indian executive director,” he said.