Pakistan’s Remittances To Cross $41 Billion This Year: Finance Minister
Pakistan’s remittances are expected to exceed $41 billion this year, marking a sharp improvement from last year and providing critical support to the country’s external account, Federal Minister for Finance and Revenue Muhammad Aurangzeb said on Wednesday.
Addressing the Pakistan Policy Dialogue, the finance minister stated that remittances stood at $38 billion in the previous financial year and are now projected to exceed $41 billion, reflecting growing confidence among overseas Pakistanis and improved macroeconomic stability.
He said structural reforms are continuing across key sectors, including a major transformation drive at the Federal Board of Revenue. He stressed that tax compliance and enforcement would be the primary tools for implementing tax laws, adding that tax policy now rests with the Ministry of Finance. At the same time, the FBR’s role is limited to revenue collection.
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The finance minister said reforms are also underway in the energy sector, while progress has been made on privatization. He noted that local investors participated in the privatization of Pakistan International Airlines, and that 24 state-owned entities have been handed over to the Privatisation Commission.
He said inefficiencies in state-owned enterprises were costing the country around Rs. 1,000 billion every year, prompting the government to shut down entities such as Utility Stores Corporation, PWD, and PASSCO, where subsidies were being misused and corruption was taking place.
Speaking on fiscal policy, Aurangzeb said repeatedly raising duties was harmful for the economy. “We need to rationalise duties and reduce the cost of doing business,” he said.
He identified debt servicing as the single largest government expense, adding that a Debt Management Office had been established to address the issue. He said the government saved Rs. 850 billion in interest payments last year, and expects a similar saving in the current financial year. He added that with lower interest rates, the need for aggressive debt management would ease.
The finance minister announced that the government plans to issue Panda Bonds in the Chinese market, saying this would help diversify financing sources. He said the bond issuance is expected within the next two weeks.
Citing survey data, Aurangzeb said 73 percent of investors are now in favour of investing in Pakistan, up from 61 percent earlier, indicating improving investor sentiment. However, he said further work was needed on business models to reduce tax and electricity costs.
He said Pakistan faced severe pressure four years ago due to a shortage of foreign exchange, forcing the country to return to the International Monetary Fund. While the trade deficit has widened, he said the current account remains within target.
Aurangzeb said the performance of large-scale manufacturing was positive in the first quarter of the current financial year. He added that private sector credit has risen to Rs. 1.1 trillion, while 135,000 new investors have entered the stock market.
According to the minister, stock market investment has increased by 41 percent in the last 18 months, and Pakistan now has the third-largest freelancer workforce globally. He said the government’s role was to provide young people with the right systems and platforms.
Looking ahead, he said Pakistan could only become a $3 trillion economy by 2047 if population growth was controlled.
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