On the global economic front, Pakistan punches well below its weight. It is a youthful country, whose population’s median age is under 23 years, blessed with abundant human and natural resources. Yet, for years, Pakistan has lagged behind other nations in this region in terms of economic growth. The country’s real GDP is forecast to expand by 4% in FY22, according to the IMF’s estimate, which is less than the average growth of 5.1% projected for all emerging markets and developing economies.
The country’s weakness can be attributed to numerous factors like terrorism and regional security issues, political uncertainty and macroeconomic instability. These factors have not only kept many foreign investors at bay but have also prevented local entrepreneurs from launching large-scale capital-intensive projects in several sectors.
To push economic growth higher and break free from the vicious cycle of low investment and low productivity, policymakers need to take immediate steps. There are no easy fixes here and structural reforms must be implemented to make the business atmosphere in Pakistan conducive for investment. The government needs to step back, deregulate industries and take measures that catalyse greater participation of private sector.