Govt's economic planning mindful of possible external and geopolitical risks, finmin tells UK MP

Finance Minister Muhammad Aurangzeb said on Tuesday that the government’s economic planning and fiscal assumptions had remained mindful of possible external and geopolitical risks, including potential “second-order impacts” arising from prolonged regional uncertainty.

The minister made these remarks during a meeting with UK Parliamentary Under-Secretary of State for the Middle East, North Africa, Afghanistan and Pakistan (MENAP), Hamish Falconer MP, held at the Finance Division in Islamabad.

The meeting was also attended by British High Commissioner Jane Marriott and senior officials from both sides.

According to a statement issued by the Ministry of Finance, the two sides held a “comprehensive exchange” on regional developments, Pakistan’s macroeconomic outlook, ongoing structural reforms, fiscal priorities, institutional modernisation, and opportunities to further strengthen Pakistan–United Kingdom economic cooperation.

“The finance minister briefed the visiting delegation on the government’s economic reform agenda and shared key priorities reflected in the budget 2026–27. He reaffirmed the government’s focus on preserving macroeconomic stability, sustaining the economic recovery, accelerating structural reforms, and creating conditions for inclusive and durable growth,” the ministry said.

The minister also referred to recent regional developments, including the easing of tensions following the recently agreed understanding between the United States and Iran.

“He underlined Pakistan’s consistent support for dialogue, de-escalation, and peaceful resolution of conflicts and noted that Pakistan had actively advocated for reducing regional tensions at an early stage. He observed that prolonged instability in the region carries implications for economic confidence, energy markets, supply chains, and growth prospects across emerging economies,” the statement said.

“The minister shared that the government’s economic planning and fiscal assumptions had remained mindful of possible external and geopolitical risks, including potential second-order impacts arising from prolonged regional uncertainty, while emphasising that improved regional stability creates more favourable conditions for investment, trade, and economic activity,” it added.

Aurangzeb also briefed the delegation on Pakistan’s ongoing fiscal and institutional reform efforts. He highlighted measures being undertaken to improve revenue mobilisation, strengthen compliance, reduce leakages, and modernise tax administration through greater use of technology, data integration, centralised processing and digital invoicing, the statement said.

He emphasised that the reform agenda sought not only to improve revenue performance but also to strengthen transparency, reduce discretionary intervention, and rebuild trust between citizens, businesses and public institutions, it added.

“The discussion further covered the government’s broader structural reform program, including privatisation, rightsizing of public sector entities, improving public expenditure efficiency, and expanding digital governance and targeted social protection mechanisms. The minister highlighted progress being made towards technology-enabled service delivery and more efficient allocation of public resources,” the handout said.

Meanwhile, Falconer appreciated the government’s commitment to economic reform and acknowledged the “seriousness and breadth of Pakistan’s ongoing transformation agenda”.

“He noted the importance of sustained reform implementation, institutional strengthening, and continued efforts to enhance economic competitiveness and governance. He also reaffirmed the UK’s interest in continued engagement and cooperation in areas of mutual economic interest,” the statement said.

Both sides reaffirmed their commitment to maintaining close engagement and strengthening Pakistan-UK cooperation in support of sustainable economic growth, institutional development and regional stability, the statement concluded.