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Pakistan Pursues Economic Reforms, Strengthens Ties with Saudi arabia
Table of Contents
Economic Stabilization and Reform Efforts
PakistanS economy has reportedly achieved macroeconomic stability and is now focused on structural reforms in key sectors, including energy and taxation, to ensure long-term sustainability. This assessment comes from the country’s minister of finance, who also noted that three global rating agencies have acknowledged improvements in Pakistan’s economic indicators. Specific agencies were not named in the report.
Prime Minister Shehbaz Sharif has identified taxation reforms and digitalization as two key priorities for the nation’s economic vision. A meaningful challenge remains in rehabilitating victims of recent floods, according to a rapid assessment completed by the government.
The minister highlighted the burden on Pakistan’s formal sector due to the limited contribution of the informal economy. He stated that 40-50% of economic activity in Pakistan remains undocumented, necessitating a move towards a cashless economy.
Strengthening Economic Cooperation with Saudi Arabia
Discussions between the Overseas Investors Chamber of Commerce and industry (OICCI), the Pakistan Business Council (PBC), and Saudi investors centered on bolstering strategic economic cooperation and identifying new opportunities for investment and trade between Pakistan and Saudi Arabia. the dialogue aimed to expand collaboration across various sectors.
ABAD and SPBC Sign Memorandum of Understanding
On Friday, October 10, 2025, the Association of builders and Developers of Pakistan (ABAD) and the Saudi Pakistan Business Council (SPBC) formalized their commitment to enhanced economic cooperation through the signing of a memorandum of understanding (MoU).
the MoU establishes a framework to promote bilateral relations, encourage investment, and expand trade and construction-related collaboration. Both organizations will actively promote Saudi investment in Pakistan’s construction and real estate sectors, and will explore potential joint ventures in development projects.
Background: Pakistan’s Economic Landscape
Pakistan has faced significant economic headwinds in recent years, including high levels of debt, fluctuating currency values, and persistent balance of payments issues. The country has repeatedly sought financial assistance from the International Monetary fund (IMF) to stabilize its economy. The IMF’s country page for Pakistan provides detailed information on its engagement with the country.
The construction sector is a key driver of economic growth in Pakistan, and increased investment from Saudi Arabia could provide a much-needed boost. Though, the sector also faces challenges, including regulatory hurdles and land acquisition issues.
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