Finance Minister Muhammad Aurangzeb on Monday said the federal government is preparing to introduce “bold measures” in the upcoming budget for FY2025-26, with a focus on strategic direction.
“We are going to bring some bold measures during the budget for FY2025-26,” said Aurangzeb, while addressing an event organised by Karandaaz Pakistan and Pakistan Banks Association (PBA) in Islamabad.
“Budget is not just about revenue and expenditure, it has to provide the strategic direction of where the economy is, and where it is heading,” he said, adding that “rather than making the math work”, the government intends to make the budget document “more strategic”.
The federal budget for FY2025-26 will be presented on June 10, 2025. Meanwhile, the Pakistan Economic Survey 2024-25 will be released on June 9, 2025.
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Talking about the recent escalation of tensions between Pakistan and India, Aurangzeb said, “These are very tense moments. The entire nation has rightly celebrated the way our armed forces and political leadership have stood up against the aggression.”
Aurangzeb shared that efforts were made to derail Pakistan’s engagement with the International Monetary Fund (IMF).
“There was no stone left unturned in terms of ensuring that the meeting [with the IMF] does not happen. If the meeting does happen, than these items are not on the agenda, whether it’s the second tranche under the Extended Fund Facility (EFF) and the $1.3 billion under the Resilience and Sustainability Facility (RSF).
“However, we are beyond that, and our case was discussed and decided on merit.”
He said the unity shown by the nation against recent aggression is the same unity needed on the economic front.
On macroeconomic stability, Aurangzeb emphasised the need to avoid repeating past mistakes.
“We have achieved macroeconomic stability in yesteryears and in the previous decades as well, but we have squandered the opportunity. Because it is easy to get into a sugar rush, i.e. pump liquidity into the market, go for consumption-led growth,” which triggers balance of payment and FX issues, said Aurangzeb.
He said that to break away from the boom and bust cycle, Pakistan needs to stay the course in terms of structural reforms.
Aurangzeb shared that the government remains committed to simplifying the tax return filing process for the salaried class. “70-80% of the salaried class don’t necessarily hold equity or income portfolios…. why should they fill 140-150 measures?
“We are trying to bring it down to nine items, five on the wealth and four on the income tax side.”
He said the government wants to implement the simplified process by the end of September.
On the SOE reforms, the finance minister admitted that “this is one area where we did not do well last year”. He said that the government remains committed to accelerating reforms in this sector.
He confirmed the PIA transaction has been relaunched and expressed optimism about its completion.
On debt servicing, Aurangzeb said in the ongoing fiscal the government debt servicing cost has decreased by Rs1 trillion. “Next year, we are going to restructure/reorganise our debt management office along the modern lines,” he said.
The finance minister was of the view that the ongoing structural reforms would put Pakistan’s economy “on a path of sustainable growth”.
Aurangzeb expressed optimism about Pakistan’s long-term economic trajectory.
“Our economy has crossed the $400 billion level. This shows we’re moving in the right direction.
“But to become a $3 trillion economy by 2047, we need to mitigate two existential issues, i.e. population and climate.”
He said four out of the six points under the 10-year Country Partnership Framework inked with the World Bank deal with climate and population.
