Pakistan’s inflation has eased and the growth of central government debt has slowed to its lowest pace in nearly 15 years, Finance Minister Muhammad Aurangzeb told a delegation from S&P Global Ratings while outlining the country’s improving economic outlook and reform progress.
Aurangzeb met officials from S&P Global Ratings in Islamabad to discuss Pakistan’s sovereign credit profile, macroeconomic performance, and the government’s ongoing reform agenda.
During the meeting, the finance minister said the country’s economic fundamentals have strengthened through fiscal discipline, structural reforms, and prudent policymaking. He pointed to stronger economic growth, improved debt sustainability, a healthier external sector, and the FY2026-27 federal budget as key drivers of the recovery.
He said the improved economic environment has resulted in lower inflation, rising foreign exchange reserves, stronger external accounts, increased investor confidence, and continued progress on key fiscal and external indicators despite global economic uncertainties.
Aurangzeb also highlighted improvements in Pakistan’s public debt position, saying the debt-to-GDP ratio continues to decline while central government debt is growing at its slowest pace in around 15 years. He added that debt buybacks, liability management operations, longer domestic debt maturities, historically lower fiscal deficits, and record primary surpluses have further strengthened the country’s fiscal position.
According to the minister, higher revenue collection and controlled government spending are helping improve fiscal sustainability and supporting Pakistan’s sovereign credit profile.
The delegation was also briefed on reforms in taxation, the energy sector, state-owned enterprises, privatization, governance, and public financial management aimed at promoting private-sector-led and export-driven economic growth.
Aurangzeb said reforms under the IMF’s Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) remain on schedule, with successful programme reviews and continued implementation of agreed benchmarks. He also reaffirmed Pakistan’s engagement with the IMF, the World Bank, the Asian Development Bank, and other development partners.
The S&P delegation acknowledged Pakistan’s progress in restoring macroeconomic stability and welcomed the government’s continued focus on fiscal discipline, debt sustainability, external resilience, and structural reforms. Both sides also exchanged views on Pakistan’s medium-term economic outlook and measures to further strengthen its sovereign credit standing.
