Pakistan must seize the moment for inclusive and sustainable growth

Pakistan's economic landscape has been under significant strain as of late 2023, with the average income of citizens reported at $1,664. The country's per capita income reached $6,212 in 2023, which remains alarmingly lower than its neighbors, Bangladesh ($9,065) and India ($10,176). The major factors contributing to this economic distress include weak growth rates, poor governance, and an overwhelming population growth rate of 2.2 percent annually. The manufacturing sector, crucial for job creation, only represented 19.36 percent of the GDP, falling short of the metrics set by India and Bangladesh, which are positioned at 28.85 and 28.77 percent respectively. Economic policies prioritizing stabilization over growth have hampered progress, with increased emphasis placed on consumption imports at the expense of proper job creation initiatives. Additionally, financial inclusion efforts by the State Bank of Pakistan have seen limited success as the focus remains heavily on supply-side policies instead of sustainable and inclusive growth initiatives. To reverse this trend and achieve higher growth rates, it is critical for Pakistan to transition from its current stabilization-centered policies to a proactive growth-centered approach. This change could lead to improved economic conditions by encouraging household savings, enhancing private investments, and attracting foreign direct investment (FDI) necessary for robust economic performance. Overall, securing a GDP growth rate of 7 percent is essential for maintaining employment levels comparable to those seen in 2018, a goal that necessitates urgent attention and strategic economic reform.