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Pakistan Pivots From Aid to Trade, Targets GCC Investment

Officials cite IMF approval with rating upgrades as validation for a pivot toward GCC-focused, investment-led growth.

Overview

  • Aurangzeb says Pakistan will move from aid dependence to trade- and investment-led partnerships, prioritizing deeper ties with GCC countries.
  • He notes the IMF Executive Board approved the second review of the Extended Fund Facility this week after its successful completion.
  • Officials report stabilization gains: inflation has fallen from a 38% peak to single digits, primary surpluses have been recorded, the exchange rate is stable, the current account is within targets, and reserves cover roughly 2.5 months of imports.
  • All three major global rating agencies upgraded Pakistan’s ratings and outlook this year, which the government presents as external validation of its reforms.
  • The agenda includes broadening the tax base to lift the tax-to-GDP ratio toward 11%, advancing energy and state-owned enterprise reforms, courting GCC investment across priority sectors, and pursuing a GCC free trade agreement described as at an advanced stage.