Pakistan seeks constructive engagement with US on trade

Showcasing progress on sustainable economic growth, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb discussed economic stability, reforms, investment opportunities, climate challenges, and trade during a series of high-level meetings in Washington, DC, including seeking constructive engagement with the United States on trade relations.

The finance minister is in Washington for the annual spring meetings of the International Monetary Fund (IMF) and the World Bank, according to press release issued by finance ministry in Islamabad on Wednesday.

The minister participated in the G-24 Finance Ministers and Central Bank Governors’ meeting and as the Second Vice Chair of the group, he highlighted Pakistan’s macroeconomic stability, achieved through resilient banking systems and sustained structural reforms.

Aurangzeb emphasized the need to stay the course on reforms amidst global economic challenges, including geopolitical dynamics, trade fragmentation, and protectionism. Additionally, he underscored the importance of regional corridors, trade connectivity, and South-South collaboration to enhance investment and trade flows.

During an IMF-hosted panel discussion titled “Revenue Mobilization in the Medium Term,” the finance minister outlined Pakistan’s efforts to broaden and deepen the tax base to ensure that sectors like agriculture, real estate, and retail contribute proportionally to GDP.

“These strategies include enhancing contributions from key economic sectors, transforming the Federal Board of Revenue (FBR) through technological advancements and process improvements, minimizing taxpayer-collector interface, strengthening enforcement and compliance, and utilizing AI for customized audits,” said the finance minister.

Aurangzeb also participated in a fireside chat at the Atlantic Council’s GeoEconomics Center, addressing “Challenges and Opportunities for the Pakistani Economy through 2025 and Beyond.” He outlined the government’s reform agenda, which includes digitalization of FBR, enhanced provincial involvement in the tax collection, and provinces’ legislation on the Agriculture Income Tax.

“Through ongoing efforts to rationalize federal spending and collaborate with provinces under a National Fiscal Pact, we’re building sustainable economic foundations,” added the minister.

Aurangzeb also addressed climate and population challenges, highlighting the World Bank’s 10-year Country Partnership Framework (CPF) for Pakistan. The minister affirmed the government’s commitment to launching the Panda Bond and appreciated multilateral institutions’ efforts in ensuring better coordination on risk analysis and due diligence. “We are finalizing a green taxonomy framework through the State Bank, paving the way for innovative instruments such as green bonds, green sukuks, and the country’s inaugural Panda bond, proceeds of which will be linked to SDG-aligned projects,” said Aurangzeb.

Expressing the government’s desire for improved trade relations with the US, Aurangzeb emphasized plans for constructive engagement with the US to address trade imbalances, with a high-level delegation expected to visit soon.

In a meeting with institutional investors, Aurangzeb provided updates on Pakistan’s economic outlook, fiscal and monetary developments, and reform progress. He highlighted the country’s macroeconomic stabilization and the recent credit rating upgrade by Fitch, which has opened avenues for Pakistan’s return to financial markets through enhanced investor confidence that.

The finance minister also met with Martin Raiser, the World Bank’s Vice President for South Asia, where he expressed gratitude for the approval of the 10-year CPF. They discussed accelerated operationalization of the CPF, need for increased private sector investment, and importance of addressing project implementation bottlenecks.

Furthermore, Aurangzeb held a meeting with the Deutsche Bank team, led by Ms Myriam Ouazzani, Managing Director for the MENA region. He expressed Pakistan’s interest in returning to financial markets, including the issuance of Panda and ESG bonds, based on the country’s improved macroeconomic stability and credit ratings.

Separately, during talks with Moody’s commercial team, the finance minister briefed them on Pakistan’s fiscal and current account surpluses, declining inflation, stable exchange rates, and foreign reserves. Discussions also covered the Panda Bond initiative, with both sides agreeing to explore future collaboration.

In an important and productive meeting with Sultan bin Abdulrahman Al-Murshid, CEO of the Saudi Fund for Development (SFD), Finance Minister Aurangzeb recalled his visit to Saudi Arabia for the Al-ula Conference on Emerging Markets and his meeting with the Saudi Finance Minister. He briefed Al-Murshid on Pakistan’s improving macroeconomic indicators, including the recent credit rating upgrade by Moody’s.

Expressing appreciation for the G2G and B2B interest in investment projects in Pakistan, Aurangzeb requested the expedited disbursement of funds under the Saudi Oil Facility, assuring prompt submission of oil shipment documentation.

Both sides reviewed the existing portfolio, expressing satisfaction over the progress, with the finance minister seeking financial support from SFD for the N-25 project.

Meanwhile, Aurangzeb said that Pakistan is open to foreign direct investments from US firms and is preparing to debut its first-ever Panda bond in the range of 200 million dollars to 250 million dollars this year.

Senator Aurangzeb was talking to the Bloomberg News during his week-long trip to the US to participate in the spring meetings of the International Monetary Fund and the World Bank in Washington.

The minister said Pakistan is looking to buy more goods from the US, including cotton and soybean, and remove non-tariff barriers to escape President Donald Trump's high tariffs. He said Pakistan is also in talks to tear down non-trade barriers to open its markets to more US products.

Aurangzeb said a trade delegation will also visit Washington in the coming months to bridge the trade gap. He said authorities in Pakistan are trying the rebuild the country's tattered economy after it came close to a default in 2023 and has won an initial nod for a 2.3 billion dollars IMF loan that will give it funding visibility until 2027.

He said Fitch also upgraded Pakistan's credit rating last week, citing confidence that Pakistan will be able to sustain reforms under the IMF loan programme.

Finance Minister calls for greater financial support to developing countries

Finance Minister Aurangzeb has called for greater financial and technical support among developing countries to navigate global economic challenges effectively.

Senator Aurangzeb was delivering statement in the G-24 Finance Ministers and Central Bank Governors' Meeting in Washington on Tuesday, on the sidelines of 2025 Spring Meetings of the IMF and the World Bank Group.

The minister highlighted the macroeconomic stability achieved by Pakistan, due to resilience of banking system and government's ongoing structural reforms.

He emphasized maintaining the reform trajectory in view of evolving geopolitical dynamics, demand fragmentation, rising protectionism, and the risks of spillovers and exogenous shocks, including trade tariffs.  

Aurangzeb underscored the importance of regional trade corridors, enhanced connectivity, and South-South cooperation as key drivers for increasing investment and trade flows.