Pakistan’s economic trajectory can no longer support a nation of 250 million people, the governor of the State Bank of Pakistan warned on Wednesday, urging the country’s political and business leadership to abandon short-term fixes and confront deep-seated structural flaws, according to Express Tribune.
Speaking at the Pakistan Business Council’s “Dialogue on the Economy,” Governor Jameel Ahmad said the country had entered a prolonged phase of stabilisation that was never meant to be permanent. Instead, it has burdened citizens with heavy taxation, expensive energy, and persistent uncertainty — all while growth continues its slow descent.
Economic expansion, he noted, has slipped from an average of 3.9% over the past three decades to just 3.4% during the last five years. “Our business cycles are shortening, and our current growth model simply cannot sustain a country of over 250 million people,” Ahmad said, calling the moment an economic “inflection point.”
The warning comes as Pakistan confronts its highest unemployment rate in 21 years; 7.1% and a poverty rate estimated by the World Bank at 44.7%. While Planning Minister Ahsan Iqbal has blamed the IMF for the jump in joblessness, former State Bank governor Reza Baqir argued that stabilisation policies must continue until the country establishes firmer ground. “Let us not declare victory too soon,” Baqir said.
Ahmad, however, stressed that stabilisation alone cannot chart Pakistan’s future. He urged policymakers to embrace long-term reforms and called on the private sector to shed its reliance on protectionism and short-term profits. “We cannot achieve sustainable growth if the private sector cannot move beyond short-term margins and the cost of long-term stagnation,” he said.
He also pushed businesses to look outward, integrate into global value chains, and modernize their operations if they hope to remain relevant in an increasingly competitive world.
The governor highlighted improvements in Pakistan’s external buffers, noting that reserves had climbed from $2.9 billion to $14.5 billion since mid-2022, due largely to strategic foreign-exchange purchases rather than fresh borrowing. Public external debt, he said, has remained near $100 billion, reducing the debt-to-GDP ratio.
Yet the path ahead, Ahmad cautioned, requires a fundamental reorientation of economic thinking. “Sustainable growth will remain elusive unless policymaking is guided by a long-term vision of socio-economic prosperity, not short-term consumption spurts,” he said.
As Pakistan stands at this crossroads, the governor’s message was clear: the country can no longer delay the difficult choices its future demands.
