PESHAWAR –
Pakistan’s Finance Minister, Muhammad Aurangzeb, has firmly ruled out the necessity of seeking assistance from the United Nations (UN) for flood relief operations. He asserted that the country possesses ample internal resources within its Rs4.3 trillion (US$12–13 billion) development budget that can be repurposed to manage the devastation caused by recent floods.
Speaking as a keynote speaker at the Pakistan Business Summit in Peshawar, the Finance Minister detailed a strategy based on effective prioritisation and coordination between the federal and provincial governments. He said this approach would allow funds to be directed towards mitigating the severe damage inflicted upon agricultural lands nationwide.
Confidence in Economic Trajectory
Aurangzeb expressed strong confidence in Pakistan’s external finances, noting significant improvement in remittances, which reached $38 billion last year and are projected to grow to between $41–43 billion in the current fiscal year.
Crucially, he highlighted Pakistan’s successful repayment of a $500 million Eurobond obligation in September without market disruption, confirming the nation is “well-positioned” to repay the upcoming $1.3 billion Eurobond due in April 2026.
Regarding the policy rate, which currently stands at 11%, Aurangzeb indicated optimism for a reduction, stating that while it is the central bank’s domain, “I think there is enough cushion that we can continue to push the rate south during the course of this fiscal year.”
Structural Reforms and FBR’s Evolving Role
The Finance Minister stressed the need for an effective structural reform agenda to propel the private sector forward, particularly focusing on restoring the “trust and credibility of tax authorities.” He noted progress in both deepening and widening the tax base.
In a significant administrative announcement, Aurangzeb confirmed that the Federal Board of Revenue (FBR) has been reduced purely to a tax/revenue collection forum. The crucial function of economic policymaking has been shifted to the tax policy office within the Finance Division, which will now be responsible for delivering the budget for the next fiscal year.
Flood Damage Assessment
The Minister’s optimism comes as Pakistan grapples with flood losses estimated at Rs371 billion, which were communicated to an International Monetary Fund (IMF) review mission. Authorities, initially targeting a 4.2% GDP growth rate for the ongoing fiscal year (FY26), have projected a downward revision of 0.3% points to 3.9% in light of the flood-related damages.
