By Staff Reporter
ISLAMABAD: Prime Minister Shehbaz Sharif said Pakistan has restored macroeconomic stability and must now generate growth through exports, singling out industries that he said have drawn state support for decades without delivering.
Sharif, speaking by video link on Thursday at a gong ceremony at the Pakistan Stock Exchange in Karachi, said some sectors had received subsidies and tariff protection since the 1960s without producing a significant increase in shipments abroad. “Instead, the prices of goods increased, quality and productivity were affected, while import substitution could not be achieved,” he said. He called it “a bitter reality that cannot be corrected without moving forward.”
He declined to name the industries. “I do not want to name the export industries that have failed to deliver,” he said, urging them to correct course. Sharif also called for an approach that puts the national interest ahead of personal gain, with progress resting on modern machinery, higher productivity and hard work.
The ceremony marked the listing of Naya Nazimabad Apartments REIT, the fourth real estate investment trust that Arif Habib Group has listed on the exchange. Finance Minister Muhammad Aurangzeb struck the gong in person, with Sharif joining virtually as chief guest. The State Bank governor, the chairman of the Securities and Exchange Commission of Pakistan and business leaders also attended. Habib, who chairs the group hosting the event, is also the sponsor of the listing.
Sharif said his recent meetings with bankers in New York and London, including executives from Citibank, JPMorgan and Barclays and the International Monetary Fund’s managing director, had produced praise for Pakistan’s structural reforms. He said the IMF chief told him “this is a new Pakistan.” His reply, he said, was: “This is not a new Pakistan, it is a new team.”
He credited the finance minister, cabinet, the Federal Board of Revenue and federal secretaries, and said the turnaround reflected political and military leadership working in step. He singled out Field Marshal Asim Munir, the chief of defence forces and army chief, as a steadfast partner in national security and economic progress. He also praised the National Accountability Bureau’s chairman for recovering public land and for a plan to set up a land bank.
Sharif pointed to a $3 billion Eurobond that drew offers of about $6 billion, State Bank foreign-exchange reserves of about $21.4 billion and commercial bank holdings of $5.5 billion. He said remittances and technology exports are rising and that Roshan Digital Account inflows remain strong. The sale, split between a $1.75 billion 5.5-year note at 7.5% and a $1.25 billion 10-year note at 7.9%, was the biggest single international bond offering in Pakistan’s history, and the largest by the country in a single transaction. Pakistan remains well below investment grade, with Moody’s rating it B3. The proceeds are less than half of the $7.1 billion trade deficit recorded in July and August, according to the Express Tribune.
The prime minister said the 2026-27 budget carried tax breaks and incentives for exporters, manufacturers and the construction industry, which he put at 2.3 trillion rupees, and that the construction measures were starting to bear fruit. He called for further modernization of the exchange and capital markets, with lessons drawn from other markets in the region.
Growth target
Aurangzeb, who addressed the same event, projected growth of 4% in the fiscal year through June 2027, up from 3.7% in the year just ended. He said the economy could expand 6% “in no time” through consumption, but that approach “will again create a balance of payments crisis and take Pakistan back to the IMF.”
He said the government wants to tighten fiscal discipline and shift its borrowing from banks toward non-bank and retail investors. He described the program of reforms agreed under the IMF’s Extended Fund Facility as ongoing. The $7 billion arrangement was approved on Sept. 25, 2024. The IMF board cleared about $1.32 billion in disbursements in May.
Aurangzeb said the number of tax filers has passed 5.7 million, from about 3.9 million a year earlier, an increase of roughly 45%. He said tax targets had been exceeded.
On housing, he said 60 billion rupees has been disbursed under the Prime Minister’s Apna Ghar program and banks have approved about 340 billion rupees more that awaits disbursement. “The real issue is no longer the issuance of loans,” he said. “The banking industry has taken the step; now the supply side has to take the step.” He called on developers, including members of the Association of Builders and Developers, to speed up construction, with REITs serving as a bridge for investment.
The finance minister said a Capital Markets Development Council, which includes the State Bank governor and the SECP chairman, is reviewing taxation and regulation across asset classes including sukuk and REITs. He said it would deliver recommendations to the prime minister’s office, the central bank, the SECP and the finance ministry “by or before the end of the year.” The SECP is drafting legislation that would later go to parliament. He added that reforms could be phased in with safeguards rather than introduced at once.
He said consortium participation by Pakistani business groups in the purchase of Pakistan International Airlines, including Habib and the Tabba family, represents close to $1.2 billion in collective investment. He cited Turkish interest in the sale of power distribution companies and US interest in minerals, agriculture, technology, oil and gas, and refinery upgrades, while cautioning that foreign investment “takes time.”
Aurangzeb recalled that when he first visited the exchange on March 29, 2024, the benchmark KSE-100 stood at about 67,000 points, against roughly 170,000 now. He said 11 initial public offerings were completed this year, the most in 20 years, and that investor participation has more than doubled in two and a half years. He said Gen Z and millennials accounted for 85% of market participation over the past 12 months.
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