Finmin says economic recovery remains intact amid regional conflict, assures uninterrupted fuel supply

Lead

Pakistan's Finance Minister Muhammad Aurangzeb said the country's economy continues to show signs of recovery despite ongoing regional tensions, citing strong growth in large-scale manufacturing, exports, remittances and foreign investment inflows. In a news conference, he assured that fuel supplies would remain uninterrupted despite the spike in oil prices due to the Middle East situation. Separately, a high-level European Union delegation called on Prime Minister Shehbaz Sharif and lauded Pakistan's role in de-escalation efforts, while vowing to enhance trade ties.

Coverage Comparison

Dawn, a Pakistani English-language daily, provided multiple reports on the economic outlook and diplomatic engagements. In one report, Finance Minister Aurangzeb addressed the EU-Pakistan High-Level Business Forum, saying economic growth would be about four per cent in the current fiscal year, a "significant improvement" compared to previous years. He highlighted a current account surplus of "a little over $1 billion in March" and expressed satisfaction over IT exports, the positive trajectory of value-added segments, and an increase in remittances. He expected foreign exchange reserves to reach "$18bn by the end of June, providing an import cover of three months."

Separately, the Ministry of Finance and the State Bank of Pakistan (SBP) showed "unanimous optimism" over economic growth and achieving fiscal and current account targets despite the regional crisis. SBP Governor Jameel Ahmed confirmed the central bank had purchased about $27 billion from the market over the past three years to boost reserves. He said expected IMF disbursements would take reserves beyond $17 billion by year-end. The finance minister announced that China had granted regulatory approval for the inaugural Panda Bond, which would be launched within ten days.

A third report focused on Pakistan's exports to European markets, noting negative growth in the first nine months of the fiscal year despite the continuation of GSP+ status. The report attributed this to a shifting global trade environment, including the US-Iran conflict impacting global goods transport, and increased competition after the EU offered preferential market access to India.

Key Claims

The following key claims were reported by Dawn:

• Economic growth is expected to be about four per cent in the current fiscal year, compared to 3.1 per cent last year.
• Large-scale manufacturing grew by 11 per cent year-on-year in April, with cumulative growth of 6.5 per cent in the first nine months.
• Exports grew by 9 per cent month-on-month and 14 per cent year-on-year.
• Remittances reached $3.5 billion in April, after $3.8 billion in March.
• Foreign exchange reserves are expected to reach $18 billion by end of June.
• Pakistan has received regulatory approval for a Panda Bond, its first access to Chinese capital markets.
• Pakistan raised $750 million through a Eurobond issuance last month.
• Exports to European markets recorded negative growth in the first nine months, with a paltry 0.94 per cent year-on-year growth to $6.86 billion.
• The US-Iran conflict has impacted global goods transport and accelerated the fall in exports to European markets.

Perspectives

Government and Military? (No, but named institutions)

Government (Finance Ministry and State Bank of Pakistan): Expresses optimism about economic recovery, citing strong manufacturing, exports, remittances, and expected IMF disbursements to boost reserves. Assures that fuel supply will remain uninterrupted and fiscal targets will be met through prudent management.

EU Delegation: Lauds Pakistan's role in de-escalation in the Middle East, expresses commitment to enhancing trade ties, and emphasizes that the EU remains Pakistan's largest trading partner. Highlights the need for continued compliance with GSP+ conditions and welcomes Pakistan's efforts to host the EU-Pakistan Business Forum.

Prime Minister Shehbaz Sharif: Reaffirms commitment to economic stabilization despite regional challenges, expresses hope for enhanced trade and investment ties with the EU, and appreciates the EU's support in hosting the forum.

Trade Analysts (unnamed in reports): Warn that the regional conflict could dampen export demand, as rising energy costs squeeze consumer spending in Europe, eroding purchasing power and weighing on demand for imported goods.