Govt policies push inflation down to 4.5%: PM

Addressing a ceremony in Islamabad regarding economic reforms, PM Shehbaz, while highlighting his government’s achievements, said that Pakistan made real, measurable progress during the past two years.

“More than one million new taxpayers have been brought into the tax net. Tax revenues rose by 26% in 2025,” the premier added.

Tax-to-GDP ratio has increased from around 8% to over 10%, the PM said, adding that the long-delayed privatisation of the Pakistan International Airlines (PIA) and the First Women Bank has been successfully completed.

The premier further said that the current account has turned into a surplus of $1.9 billion from a deficit of $3.3 billion.

Foreign exchange reserves have more than doubled from 9.2 billion to $21.2 billion during the past two years, he added.

“Foreign institutions have also acknowledged our achievements,” the PM said, adding that the country’s economy, by the grace of Allah Almighty, is moving towards growth.

While addressing the ceremony, the premier recalled that when this government assumed office two years back, the economy they were inherited was confronting immense challenges.

He said that internationally, Pakistan was sidelined and was not part of the main frame of global economic engagement.

“Economically, we were struggling, inflation was around 30%, reserves were dwindling, confidence had evaporated,” said PM Shehbaz.

PM said: “I knew that the challenges were immense and the task was difficult, but not impossible”

This was not the first time that the PML-N government had been entrusted with pulling Pakistan back from the brink, he added.

The PM said: “In 1997, we faced economic sanctions and isolation. Yet we stabilised the economy. And when we inherited crippling energy shortages, terrorism and economic stagnation, but we brought the country back on track.”

The premier said that when they assumed office in 2024, they knew exactly the challenges lying ahead for them.

"There was no doubt that restoring Pakistan’s economy would demand hard choices, choices that would not spare our own political constituency and there could be no shortcuts, no populism, no denial," he added.

It was time for an economic crusade, he said, adding that they took very difficult decisions to pull Pakistan out of economic crisis and put it back on the path of stability and gradual growth.

"We withdrew subsidies. We initiated long-delayed privatisation reforms and restored physical discipline," he added.

The PM said: “Today the results speak for themselves.”

Addressing the event, Finance Minister Muhammad Aurangzeb said that the government took several steps to stablise the economy, reduce inflation and boost investment in the country.

“Inflation is at its lowest level in the country’s history,” the ministry said, adding that key economic indicators were showing improvement.

Despite devastating floods in 2025, the government decided not to seek assistance from international financial institutions.

The finance minister said the government saved Rs600 billion to Rs700 billion through better fiscal planning and loan management.

He said investors’ confidence had improved following economic reforms, adding that 16 new IPOs are expected in the coming year.