Davos – January 22,2026 : Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, has underscored the importance of fiscal discipline, productive use of debt and export-led growth as key pathways to unlocking new sources of economic growth, while speaking at a high-level panel discussion on “How Can We Unlock New Sources of Growth? – Weight of Global Debt” held on the sidelines of the World Economic Forum in Davos said a official handout issued here by the Finance Division on Thursday.
Presenting an emerging markets perspective, Senator Aurangzeb emphasized that debt, in itself, is not inherently negative, provided it is deployed productively. He noted that for countries like Pakistan, debt must be directed toward investments that generate exportable surplus rather than consumption, enabling sustainable repayment and long-term growth. He highlighted that emerging economies do not have the privilege of reserve currencies and therefore must ensure market efficiency, prudent borrowing and careful management of foreign exchange risks.
The Minister stressed that unsustainable debt trajectories are fundamentally a consequence of weak fiscal discipline. He shared that Pakistan has made significant progress by reducing its debt-to-GDP ratio from 75 percent to 70 percent, achieving a primary surplus and restoring fiscal balance through responsible economic management. He added that inflation in Pakistan has declined sharply from a peak of 38 percent to single digits, while the policy rate has been reduced from over 22 percent to 10.5 percent, placing the country on the favourable side of the interest rate cycle.
Senator Aurangzeb highlighted ongoing debt management reforms, including liability management operations, debt buybacks and efforts to create value in domestic markets. He also announced that Pakistan is set to enter the Chinese capital market with its inaugural Panda bond, structured as a green bond, reflecting the country’s commitment to sustainable and climate-resilient financing.
Addressing the issue of climate change, the Minister stated that for Pakistan and other vulnerable emerging economies, climate risks are real, recurring and economically disruptive. He noted that building fiscal buffers has enabled Pakistan to respond to recent floods through domestic resources rather than international emergency appeals, underscoring the importance of fiscal resilience in the face of exogenous shocks.
He further highlighted the role of public-private partnerships and capital markets in financing adaptation and development projects, citing the successful closure of Pakistan’s largest-ever syndicated financing of approximately USD 3.6 billion for a major copper mining project. The project, he noted, is expected to generate around USD 2.8 billion in exports annually from 2028, significantly strengthening Pakistan’s export base and supporting global energy transition needs.
Responding to a question from the audience on technology funding and the new economy, Senator Aurangzeb emphasized Pakistan’s strong potential in IT, freelancing and digital services, noting recent growth in IT exports and ongoing investments in skills development, blockchain and emerging technologies. He reiterated that access to funding is not the core challenge; rather, capacity building, prioritization and effective execution are critical to translating opportunities into sustainable growth.
Concluding his remarks, the Minister stated that responsible fiscal management, strategic use of debt, investment in the new economy and climate resilience are central to Pakistan’s growth strategy, adding that “it is not about the availability of debt or funding, but how wisely and effectively it is steered to create long-term economic value.”
The panel discussion was hosted and moderated by Joumanna Bercetche, Anchor, Bloomberg News, and featured leading global financial and investment figures, including Anne Walsh, Managing Partner and Chief Investment Officer of Guggenheim Partners; Ronald P. O’Hanley, Chairman and Chief Executive Officer of State Street; and Jennifer Johnson, Chief Executive Officer of Franklin Templeton.
