Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, underscored the critical importance of fiscal discipline, productive debt utilization, and export-led growth during a high-level panel discussion titled “How Can We Unlock New Sources of Growth? – Weight of Global Debt,” held on the sidelines of the World Economic Forum (WEF) in Davos.
The session, moderated by Bloomberg News Anchor Joumanna Bercetche, featured global financial leaders including the CEOs and CIOs of Guggenheim Partners, State Street, and Franklin Templeton.
Productive Debt and Market Efficiency Presenting an emerging markets perspective, Senator Aurangzeb challenged the notion that debt is inherently negative. He emphasized that for developing nations like Pakistan, the efficacy of debt depends entirely on its deployment. “Debt must be directed toward investments that generate exportable surplus rather than consumption,” the Minister stated, noting that this strategy is the only way to ensure sustainable repayment and long-term economic expansion.
Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, participated in a high-level panel discussion on “How Can We Unlock New Sources of Growth? – Weight of Global Debt” at the World Economic Forum in Davos.
Speaking from an emerging markets perspective, the… pic.twitter.com/HFfCqZcJPL— Ministry of Finance, Government of Pakistan (@Financegovpk) January 21, 2026
Restoring Fiscal Balance
Senator Aurangzeb shared Pakistan’s recent economic successes as a blueprint for responsible management. Key highlights included:
- Debt-to-GDP Reduction: A decrease from 75 percent to 70 percent.
- Inflation Control: A sharp decline from a peak of 38 percent to single digits.
- Monetary Easing: A reduction in the policy rate from over 22 percent to 10.5 percent, positioning Pakistan favorably in the global interest rate cycle.
- Primary Surplus: The restoration of fiscal balance through prudent borrowing and market efficiency.
Innovative Financing
The Panda Bond In a landmark announcement, the Minister confirmed that Pakistan is set to enter the Chinese capital market with its inaugural Panda Bond. Structured as a “Green Bond,” this initiative reflects Pakistan’s commitment to sustainable, climate-resilient financing and diversifying its source of capital.
Climate Resilience and Strategic Projects
Addressing climate change, the Minister noted that Pakistan is now building domestic fiscal buffers to manage recurring exogenous shocks, such as floods, without relying on international emergency appeals. He cited the successful closure of Pakistan’s largest-ever syndicated financing—approximately USD 3.6 billion—for a major copper mining project. This project is projected to generate USD 2.8 billion in annual exports starting in 2028, contributing significantly to the global energy transition.
The New Economy and Technology
Responding to queries on the digital economy, Senator Aurangzeb highlighted Pakistan’s burgeoning IT and freelancing sectors. He reiterated that while funding is available, the true catalysts for growth are capacity building, prioritization, and effective execution in emerging technologies like blockchain.
The Minister concluded by emphasizing that Pakistan’s growth strategy is steered by the wisdom of investment rather than the mere availability of funds. “It is about how effectively debt is steered to create long-term economic value,” he remarked.
