Aurangzeb Defends GDP Figures Amid Economic Concerns

Finance Minister Muhammad Aurangzeb dismissed concerns over Pakistan’s GDP calculations and economic data on Saturday. He asserted that all national accounts are compiled under internationally recognized standards, specifically the United Nations System of National Accounts (SNA 2008) with 2015-16 as the base year.

Aurangzeb also highlighted the importance of national consensus in sustaining economic recovery and reform momentum. The government has presented a “balanced, growth-oriented and stability-focused budget” for Federal Budget 2026-27, which features significant improvement in key macroeconomic indicators over the past year.

Responding to concerns raised by lawmakers about discrepancies in budget documents and national income statistics, Aurangzeb categorically rejected the allegations. He clarified that there had been no change in methodology used for calculating GDP, per capita income, or other national accounts aggregates.

Nominal GDP was calculated at current market prices and converted into US dollars using average exchange rates, with Pakistan’s economy estimated at around $452 billion in FY2025-26. Per capita income was based on gross national income and population estimates derived from the 2023 census.

The finance minister also played a constructive diplomatic role in facilitating dialogue between the United States and Iran, which he said helped reduce tensions and prevent escalation – a matter of national pride. He noted that Large-Scale Manufacturing (LSM) grew by around 6.5 percent, the highest in four years, while the current account remained in surplus for the 11th consecutive month.

Record monthly remittances of $4.25 billion were also reported, with total remittances expected to exceed $41 billion during the fiscal year. IT exports grew by about 20 percent and were expected to cross $4.5 billion, while freelancers contributed $1.6 billion in foreign exchange earnings.

Aurangzeb said the government’s strategy focuses on export-led, sustainable and inclusive growth aimed at increasing productivity and generating employment opportunities. Tax reforms are designed to broaden the tax base rather than increase the burden on existing taxpayers, with relief provided to salaried individuals, small businesses, industry, exporters and the construction sector.

The minister said reforms included separation of tax policy from administration and introduction of a modern, digital tax operating model to reduce direct interaction between taxpayers and officials. Automation, artificial intelligence and faceless systems would enhance transparency and reduce harassment.

Pakistan generated around $14 billion in additional tax revenue over the past two years, with reforms and leadership under Prime Minister Shehbaz Sharif credited for this success. On agriculture, Rs300 billion in interest-free loans were provided under the “Zarkhez” programme for small farmers, benefiting around 750,000 farmers.

Cooperation with China was expanding, with more than 800 Pakistani students, farmers and agricultural graduates already trained in modern farming techniques. The government also promoted affordable housing through the “Apna Ghar” programme to stimulate construction activity and job creation.

Relief measures included increases in salaries, pensions and minimum wages, along with digital facilitation for pensioners through facial recognition-based life verification using the Pak-ID app. Taxes had been reduced or abolished on essential health items, including contraceptives and life-saving medicines, to improve access to healthcare.

Aurangzeb paid tribute to parliamentary committees, coalition partners, opposition members, business community representatives and media stakeholders for their input in improving the budget. He appreciated the Speaker of the National Assembly for fiscal discipline measures that resulted in savings of around Rs5 billion.