On November 17, 2024, Federal Minister for Finance and Revenue Muhammad Aurangzeb expressed optimism that Pakistan's economy could reach $3 trillion by 2047, a significant increase from its current $300 billion status. He emphasized the necessity for a Charter of Economy and a Charter of Environment to guide this ambitious goal. The government is targeting a tax collection of Rs12.97 trillion and has ruled out the implementation of a mini-budget, indicating a focus on fiscal stability [5806ee75].
This optimism comes in the context of ongoing discussions with the International Monetary Fund (IMF) regarding a $7 billion bailout approved in September. The IMF mission chief Nathan Porter recently engaged with Pakistani officials to assess the country's fiscal situation, which is currently grappling with a revenue shortfall of nearly 190 billion rupees (approximately $685 million) for the fiscal year [755a9b8a].
Pakistan's financial landscape is precarious, requiring around $25 billion for the fiscal year 2023–2024. While the country has secured temporary relief through the IMF agreement, the need for further financial stability remains critical. As part of its strategy, Pakistan aims to re-profile $12 billion in bilateral debt, with significant amounts owed to the UAE, China, and Saudi Arabia [dcf6e45f].
The IMF's recent Country Report No. 2024/310 underscores the importance of macroeconomic stability and sustainable growth in Pakistan. A nine-month Stand-By Arrangement (SBA) of $3 billion has been initiated to mitigate fiscal risks, alongside a fiscal strategy for FY2025 that focuses on broadening the tax base. The report highlights Pakistan's low tax-to-GDP ratio and calls for reforms in revenue collection and the implementation of a National Fiscal Pact to reorganize federal-provincial fiscal relations [8ab008ca].
In terms of foreign direct investment (FDI), Pakistan has seen an increase to $1.9 billion in 2023–2024, up from $1.6 billion the previous year. Both Saudi Arabia and the UAE have shown interest in investing in sectors such as agriculture and mining, although previous efforts to secure investments have faced challenges [dcf6e45f].
Aurangzeb acknowledged setbacks in the privatization of Pakistan International Airlines (PIA) but praised the fiscal efforts of provincial governments like Sindh and Khyber Pakhtunkhwa. The cabinet has also approved the National Fiscal Pact without changes to the National Finance Commission framework, indicating a commitment to fiscal reforms [5806ee75].
Amid these economic challenges, Pakistan is pursuing ambitious proposals to boost its GDP by $100 billion by 2035, with initiatives in agriculture, tourism, and labor export. The agriculture sector is projected to evolve into a $30 billion industry, while promoting Gandhara-based Buddhist tourism could attract significant global interest [68ca452d].
The IMF report stresses the importance of effective liquidity management and cash balance optimization, alongside investment in human capital and social support programs. It also calls for a tight monetary policy to manage inflation and highlights the need for legal reforms to ensure financial stability [8ab008ca].
Pakistan's per capita income has recently risen to $1680 in FY 2024, reflecting some positive economic activity. The ICT sector has shown promising growth, with exports reaching $2.283 billion during FY 2024, indicating a strong potential for digital economy expansion. The government is focusing on enhancing the IT sector with significant budget allocations and initiatives aimed at digital transformation, which aligns with the broader economic goals outlined in Vision 2035 [7d611e80].