Pakistan’s Finance Minister Aurangzeb said debt can boost the economy if used for productive investments. He spoke at the World Economic Forum in Davos on Wednesday. Aurangzeb emphasized fiscal discipline, export-led growth, and climate resilience as key priorities for long-term development.
Aurangzeb noted that borrowing should fund projects that generate exportable surplus rather than consumption. He highlighted Pakistan’s achievements, including reducing the debt-to-GDP ratio from 75% to 70%, achieving a primary fiscal surplus, and lowering inflation to single digits. The central bank has also cut the policy rate to 10.5%, signaling improved economic stability.
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He cited the Reko Diq copper project, expected to bring $2.8 billion in annual exports after 2028, as an example of productive investment. Aurangzeb also pointed to growth in IT, freelancing, and digital services, aligning with Pakistan’s pivot toward an export-driven economy.
Weight of Global Debt with Muhammad Aurangzeb (@Financegovpk), @JoumannaTV (@Bloomberg), Jennifer Johnson (@FTI_US), Ronald P. O’Hanley (@StateStreet), Anne Walsh (@GuggenheimPtnrs) #WEF26 https://t.co/kk1wjg42F8
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Public-private partnerships and capital markets are increasingly supporting development, he added. Pakistan recently issued its first Panda bond—a green bond in China’s markets—to finance sustainable projects. Aurangzeb stressed that strategic investments, not debt alone, drive meaningful economic growth.
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Aurangzeb also highlighted climate change as a major economic threat. He praised Pakistan’s response to recent floods using domestic resources, saying resilience and implementation matter more than external aid. His remarks underscore Pakistan’s strategy to balance debt, fiscal discipline, and climate resilience for long-term growth.