Pakistan Shifts Toward Growth Phase as FY27 Budget Focuses on Exports, Investment and Tax Reforms

Islamabad – Finance Minister Muhammad Aurangzeb on Saturday said that Pakistan’s economy is now transitioning from stabilisation to growth, as he defended key policy measures announced in the federal budget 2026-27 during a post-budget press conference in Islamabad.

The briefing was attended by Information Minister Attaullah Tarar, Minister of State for Finance Bilal Azhar Kayani, and senior officials from the Federal Board of Revenue (FBR), where the government explained its fiscal strategy and addressed concerns regarding taxation, investment and economic direction.

Export-Led Growth at the Core of Budget Strategy

Finance Minister Aurangzeb said the central theme of the budget is to promote export-led economic growth, adding that Pakistan cannot achieve long-term stability without increasing its export base and strengthening the private sector.

He stated that the government has introduced a series of reforms aimed at improving competitiveness in international markets, including reduction in corporate taxation pressure and incentives for exporters.

Among the key measures, the government has abolished advance tax on exporters and reduced super tax slabs for large businesses, a step aimed at encouraging industrial expansion and investment.

Investment Confidence and Macroeconomic Stability

The finance minister emphasized that macroeconomic stability is essential for sustainable growth. He said that stable foreign exchange reserves, controlled inflation, and consistent policies are necessary to rebuild investor confidence.

According to him, domestic investors will respond first to stability, followed by increased foreign investment inflows.

He further added that the government is committed to maintaining policy continuity to ensure long-term economic predictability.

Digital Tax Reforms and FBR Modernization

Aurangzeb highlighted major reforms in the Federal Board of Revenue, stating that Pakistan is moving toward a modern tax system based on automation and digital monitoring.

He revealed that artificial intelligence (AI), data analytics, and digital tracking systems will be used to reduce human intervention and improve tax compliance.

The government also plans to expand the tax base by bringing retail, wholesale, and untaxed sectors into the formal economy through new regulatory frameworks.

Relief Measures for Salaried Class

The finance minister said that the government has provided targeted relief to the salaried class by adjusting income tax slabs and easing pressure on lower-income earners.

He noted that fiscal space was limited, but the government prioritized relief for working individuals while maintaining fiscal discipline under IMF guidelines.

Focus on Agriculture and Construction Sectors

Aurangzeb described agriculture as a key pillar of the economy, noting that agricultural credit has crossed significant levels and continues to grow.

He added that small farmers are being supported through collateral-free loans and subsidized financing schemes to improve productivity.

In the construction sector, the government has introduced incentives aimed at boosting housing demand and stimulating related industries, which collectively drive employment and economic activity.

Export Financing and Industrial Support

The government has also proposed additional support for exporters through the Export Refinance Scheme, including subsidies worth billions of rupees to reduce financing costs for businesses.

Officials believe this will enhance Pakistan’s competitiveness in global markets, especially in textiles, IT, and manufacturing sectors.

Petroleum Prices and External Risks

During the briefing, the finance minister clarified that there is no proposal to increase petroleum levy. However, he acknowledged that global oil price fluctuations and geopolitical tensions in the Middle East could impact Pakistan’s economy in the coming fiscal year.

He said that such risks have already been incorporated into the government’s fiscal projections.

Economic Outlook

According to the government’s projections, Pakistan aims for around 4% economic growth in the coming fiscal year while keeping inflation under control.

Officials expressed confidence that structural reforms, improved revenue collection, and export expansion will help stabilize the economy and create long-term growth opportunities.

Conclusion

The post-budget press conference underscored the government’s commitment to shifting Pakistan’s economy toward a more export-driven and investment-friendly model. While challenges remain, especially in fiscal management and global uncertainty, the government maintains that the FY27 budget sets a clear direction for sustainable economic progress.