Aurangzeb rules out consumption-led growth, vows tariff reforms will continue
Speaking at LUMS, the finance minister pointed to IT exports rising from under $1 billion to $4.6 billion, exporter financing at 4.5 percent, and a current account deficit near 0.1 percent of GDP.
Finance Minister Muhammad Aurangzeb has ruled out pursuing liquidity-fuelled, consumption-led economic growth, saying Pakistan must prioritise sustainable, export-led expansion and press on with tariff reforms to make its industries competitive, regardless of the political pressure for short-term stimulus.
"We are very clear: no matter how much pressure there is, we are not going to go for liquidity-fuelled, consumption-led growth," Aurangzeb told an event at the Lahore University of Management Sciences (LUMS) on Saturday, organised by the American Business Forum. He argued that Pakistan could not afford another round of import-dependent booms that have repeatedly ended in balance-of-payments crises and emergency IMF interventions.
On trade policy, the minister said the government was in the second year of a multi-year tariff reform programme and would not reverse course. "We are in year two of the tariff reform, and we are going to continue with that; there is no turning back," he said, adding that domestic industries had been protected for too long through tariffs without sunset clauses, a practice he indicated would not return.
Aurangzeb listed the measures the government says are redirecting the economy toward exports, including the elimination of super taxes, reductions in income tax slabs, and concessional financing for exporters at 4.5 percent. The export-push agenda, he argued, was already visible in the information-technology sector, where export services have grown from under $1 billion to $4.6 billion and are projected to reach $5.5 billion in the current fiscal year.
The minister also pointed to macroeconomic stabilisation markers: record remittances had helped narrow the current account deficit to around 0.1 percent of GDP, the twin deficits had fallen from 12.5 percent of GDP to 2.6 percent, the fiscal deficit had dropped to a 22-year low, and foreign exchange reserves had recovered to more than three months of import cover from roughly two weeks at the height of the crisis. External debt payments, he said, had declined from $26.5 billion to $21.5 billion.
Aurangzeb was speaking alongside American Business Forum president Osman Khalid Waheed, former State Bank governor Raza Baqir and Habib Group vice chairman Salman Burni. The panel's consensus message — that Pakistan's next growth phase must be earned in export markets rather than borrowed into existence — lands as the government prepares the next phase of its tariff rationalisation and seeks to lock in the gains of a difficult stabilisation programme.
