By Staff Reporter
KARACHI: Finance Minister Muhammad Aurangzeb struck an optimistic tone on the nation’s current account trajectory, projecting a surplus for the full fiscal year 2025 even as the central bank warned of a potential deficit, underscoring diverging views within the country’s economic leadership.
Speaking at a pre-budget seminar hosted by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Karachi on Wednesday, Aurangzeb dismissed the State Bank of Pakistan’s (SBP) half-yearly report, which estimated the current account could swing between a deficit or surplus of 0.5 percent of GDP for FY25. “The current account will remain positive for the full FY25,” the minister said, without specifying the scale of the projected surplus.
The remarks signal a rare public disconnect between the finance ministry and the central bank, which has maintained a cautious stance on external balances.
The SBP’s half-yearly report, released earlier this week, had cautioned that global energy price volatility and uneven export growth could pressure the external account. Pakistan’s current account recorded a $491 million surplus in the first 10 months of FY24, aided by IMF-prescribed austerity measures and import curbs.
But analysts say the gains remain fragile: Reserves stand at $9.4 billion — barely covering two months of imports — while $24 billion in external debt repayments loom through 2026.
Aurangzeb doubled down on structural reforms, forecasting the tax-to-GDP ratio will rise to 10.6% in FY25 from 9.5% in FY24, with a three-year target of 13.5%. The push comes as Islamabad implements International Monetary Fund program, which the minister insisted would be Pakistan’s last.
“This will be the last IMF program for Pakistan,” he said, without elaborating on the timeline or conditions.
The government plans to appoint independent analysts to align the FY26 budget with “global best practices,” Aurangzeb added, signaling a shift toward technocratic policymaking.
He pledged targeted tax relief for businesses and salaried individuals in FY26, though he acknowledged IMF constraints would limit near-term measures. ““Every sector of the economy has to pay due taxes to lower burden of the high taxation on salaried class people and manufacturing industries.”
The minister identified high taxation, energy costs, and financial expenses as key hurdles for businesses. While inflation has cooled from record highs, structural reforms in energy and tax administration remain critical to sustaining growth.
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