Economic Growth Insufficient to Tackle Pakistan’s Poverty and Job Challenges, Warns Expert

Karachi: Mian Zahid Hussain, a prominent figure in Pakistan’s business and policy circles, has raised concerns over the country’s current economic growth trajectory, asserting that the projected 3.0% GDP growth is inadequate to address pressing issues like poverty and unemployment.

Hussain, who leads several business forums and has a background in governmental roles, highlighted a World Bank report that acknowledges Pakistan’s macroeconomic stability, achieved through fiscal policies that reduced inflation and created a primary surplus. This stability enabled a GDP growth increase from 2.6% in FY24 to 3.0% in FY25.

However, Hussain emphasized that while these measures have stabilized the economy, they have also placed a significant burden on ordinary citizens. He pointed to climate-related disasters, such as floods, which continue to strain agricultural productivity and the broader economic landscape.

The World Bank’s projections, as noted by Hussain, paint a challenging picture for the future. Real GDP growth is expected to hover at 3.0% in FY26, with a modest rise to 3.4% in FY27. This growth rate fails to keep pace with the influx of 1.6 million young job seekers entering the market annually, contributing to a minimal decline in the national poverty rate.

A decline in export competitiveness further complicates the economic outlook, with exports dropping from 16% of GDP in the 1990s to just 10% in 2024. Hussain warned that the country’s dependence on debt and remittances perpetuates a vulnerable economic cycle, while projected inflation poses additional threats to the most vulnerable populations.

Hussain advocated for urgent fiscal and trade reforms, echoing the World Bank’s recommendations. He urged the government to expand the tax base, enhance public sector efficiency, stabilize the exchange rate, and prioritize cost-cutting measures to boost exports. Investment in climate-resilient infrastructure is also crucial for long-term economic resilience.

Concluding his remarks, Hussain underscored that without significant reforms and a shift towards export-oriented growth, Pakistan risks economic stagnation. A sustained 6% growth rate is essential to create jobs and significantly reduce poverty, he warned.