Pakistan on track for growth through Islamic financing: Finance Minister

ISLAMABAD: Pakistan’s economy is on a promising path to sustainable growth, according to Finance Minister Muhammad Aurangzeb.

Speaking on Thursday, he shared the government’s plans to secure crucial funding for infrastructure and poverty alleviation, with a special focus on Shariah-compliant bonds like Sukuks.

In a virtual address at the second International Islamic Capital Markets Conference & Expo in Karachi, Aurangzeb recognised the economic struggles Pakistan has faced in recent years but assured that the country is now on track.

“We’ve tackled these challenges, and we’re now moving in the right direction towards macroeconomic stability and long-term growth,” he said.

Aurangzeb pointed out that Islamic financial tools, such as Sukuks and other Shariah-compliant investments are required for raising funds for key sectors like infrastructure and poverty reduction.

“With the right mechanisms in place, Pakistan has the potential to become a global leader in Islamic finance,” he added.

The minister also reiterated the government’s commitment to reshaping Pakistan’s financial system in line with Shariah principles.

He explained that the aim is not just to attract new investment through Islamic finance but also to reduce the country’s reliance on interest-based borrowing.

Aurangzeb provided some statistics to show the growing role of Shariah-compliant products in the market. He shared that 56 per cent of the market capitalisation at the Pakistan Stock Exchange (PSX) consists of Shariah-compliant securities, and 48 per cent of mutual fund assets follow these principles.

Moreover, 66 per cent of funds in voluntary pension schemes and 95 per cent of real estate investment trust (REIT) assets are Shariah-compliant.

He stressed that the conference serves as a reminder of Pakistan’s commitment to developing a strong Islamic capital market and transforming the economic system in line with Shariah values.

According to Business Recorder, Deputy Governor of the State Bank of Pakistan, Saleem Ullah, also addressed the conference, acknowledging the significant challenge of converting Pakistan’s large debt into Shariah-compliant products.

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