Pakistan Targets 4% Economic Growth, Seeks EU

Muhammad Aurangzeb has expressed confidence in Pakistan’s economic outlook, stating that the country is on track to achieve 4% growth this fiscal year. He made these remarks while addressing the first-ever EU-Pakistan Business Forum in Islamabad.

According to Beyond Time News, the finance minister assured European investors that the government remains committed to fiscal stability. He also emphasized that long-term reforms are being pursued to fix structural weaknesses in the economy.

Economic Stability Despite Global Challenges

Despite ongoing tensions in the Middle East, Aurangzeb said Pakistan’s external sector remains stable. This stability has been supported by financial inflows, including loans from friendly countries and private investments.

For instance, Pakistan managed to repay $3.5 billion owed to the United Arab Emirates by securing a $3 billion loan from Saudi Arabia. In addition, a private Eurobond placement helped strengthen foreign reserves.

As a result, reserves are expected to reach $16 billion by the end of the month. The government aims to further increase them to $18 billion by June.

Reforms and Investor Confidence

Aurangzeb highlighted that consistent policies are key to attracting foreign investment. In the past, sudden changes in taxation and energy policies created uncertainty for investors.

However, he assured participants that there are no restrictions on profit repatriation. He encouraged companies facing issues to contact the State Bank of Pakistan for resolution.

Moreover, the government plans to issue $250 million in Panda bonds soon. At the same time, it expects inflows through Roshan Digital Accounts to continue supporting foreign exchange reserves.

Strong EU-Pakistan Economic Ties

During the forum, Raimundas Karoblis noted that the European Union remains Pakistan’s top export destination.

The event also marked the launch of the EU-Pakistan Business Network. This platform brings together over 300 European companies operating in Pakistan. It aims to improve dialogue with policymakers and encourage new investments.

Read more:Pakistan Economy Set to Grow Around 4% This Fiscal Year: Finance Minister

EIB Returns with €160 Million Investment

In a major development, the European Investment Bank has returned to Pakistan after a decade. The bank announced €160 million in loans for housing and water projects.

Out of this, €100 million will support the reconstruction of homes in Sindh. These homes were damaged during the devastating 2022 floods. The project aims to rebuild around 2.1 million houses, focusing on vulnerable communities.

Additionally, €60 million will be used to improve water quality in Karachi. This includes building filtration plants in Gharo and Pipri. These facilities are expected to supply nearly one billion litres of clean water daily.

A Step Toward Sustainable Development

These projects fall under the EU’s Global Gateway initiative, which promotes sustainable development. The focus is on climate resilience, especially in flood-affected and heat-prone regions.

Overall, Pakistan’s push for economic growth, combined with renewed European investment, signals a positive shift. While challenges remain, the government appears determined to stay on the path of stability and reform.