The country’s economic situation remains disconcerting. The UN’s World Economic Situation and Prospects report for 2024 painting a bleak picture of the economy projects GDP growth of two percent in 2024 and a slightly improved 2.4 percent in 2025. This underscores the need for strategic and comprehensive solutions to put the country on the path of a robust growth trajectory.
Unveiling alarming statistics about Pakistan’s economic indicators, the UN report highlights inflation rate surged to a staggering 39.18 percent last year prompting the State Bank of Pakistan to uphold a record-high policy rate of 22 percent since June 2023. Additionally, Pakistan grapples with substantial sovereign debt, with external debt accounting for 36.5 percent of the nominal GDP in 2023, coupled with a government debt-to-GDP ratio reaching 89 percent in 2022.To overcome these challenges, Pakistan requires sustained and a robust economic growth. According to experts, we need to achieve a growth rate of 7-8 percent for an extended period, spanning 30 years to reduce public debt as well as for generating employment opportunities in the face of a burgeoning population. To embark on this growth trajectory, we must undertake structural reforms in institutions. These reforms necessitate difficult decisions, signalling a commitment to addressing the root causes of economic challenges.
From improving governance to enhancing the efficiency of public services, a comprehensive overhaul is imperative. Then a crucial aspect of a robust growth involves promoting investment and productivity. Encouraging both domestic and foreign investment can inject vitality into various sectors, fostering innovation and job creation. Policies that incentivize entrepreneurship and empower industries will play a pivotal role in this regard. Amidst the economic challenges, there is optimism surrounding the initiatives of the Special Investment Facilitation Council (SIFC). The SIFC aims to streamline and facilitate investment, providing a conducive environment for economic development. These initiatives, if successful, have the potential to enhance productivity in key sectors, including agriculture and industries. Political stability is paramount to steer the country in the right direction. Greater political stability instils confidence in investors, both domestic and foreign. Hence, all stakeholders must play their role to ensure a stable political environment which will create an atmosphere conducive to long-term planning and foster trust in the economic policies.
