Pakistan's finance ministry said the country was confronting challenges including high inflation, low growth and low levels of foreign exchange reserves, and fiscal consolidation was key for exchange rate stability and saving the reserves.

In a monthly economic update and outlook for January, the ministry said on Tuesday: "long-run prosperity and growth can only be achieved by augmenting the country's long-term equilibrium growth path by expanding production capacities and productivity". (Reporting by Shivam Patel in New Delhi)