Pakistan is currently implementing significant economic reforms aimed at achieving sustainable and inclusive growth, following a period of severe fiscal pressures and record inflation rates reaching 38%.

Finance Minister Muhammad Aurangzeb is attending the World Economic Forum Annual Meeting in Davos, which runs from January 20 to 25, to engage in discussions about global challenges and opportunities.

Investor confidence in Pakistan has surged to a two-year high, with foreign direct investment increasing by 20% in the first half of fiscal year 2025, alongside record remittances totaling $35 billion.

In an article for the World Economic Forum, Aurangzeb highlighted Pakistan's innovative taxation and economic stabilization strategies, emphasizing the country's commitment to reform.

A reform-oriented budget introduced in June 2024 aims to raise Rs13 trillion in revenue, marking a 40% increase from the previous year by broadening the tax base and enhancing compliance through technology.

Aurangzeb invited global investors to support Pakistan's development in key sectors such as agriculture, IT, renewable energy, and pharmaceuticals, while also promoting partnerships focused on climate resilience.

Despite improvements, the Finance Minister noted that foreign exchange reserves remain critically low, covering only two weeks of essential imports, a situation exacerbated by COVID-19 and devastating floods that caused over $30 billion in damages.

He emphasized the necessity for structural reforms in revenue collection, energy, and state-owned enterprises to reduce the country's reliance on external assistance.

As of January 2025, inflation has decreased significantly to 4.1%, and foreign exchange reserves now cover over two months of imports, indicating a positive trend in economic recovery.

All three major global rating agencies have upgraded Pakistan's sovereign ratings, with Moody's revising the economic outlook to 'Positive' in September 2024, reflecting improved fiscal stability.

Goods exports have risen by 7.1%, the IT sector has experienced a remarkable 28% year-on-year growth, and Pakistan's global default risk has decreased by 93%.

In 2024, the government launched 'Uraan Pakistan', an economic transformation plan targeting 6% GDP growth by 2028, focusing on key sectors such as agriculture, energy, textiles, and IT.

Key reforms have included stabilizing the exchange rate, tightening fiscal policies, and curbing inflation, supported by a $7 billion IMF Extended Fund Facility.

The equity market in Pakistan has yielded an impressive 87% return in dollar terms, attracting significant global investment from major companies like Aramco and Samsung.