Pakistan’s Economy Struggles Amid Stagnant Growth and Rising Poverty

ISLAMABAD: Pakistan’s economy continues to show troubling signs of stagnation, with per capita GDP growth hovering near zero since 2024, marking the slowest pace in South Asia. Despite efforts to stabilize, the economy resembles a patient recovering from critical care but still requiring significant support.

Recent data reveals that the country’s extreme poverty rate stands at 23%, a stark contrast to neighboring India, where the rate is approximately ten times lower. Once a regional leader in economic performance, Pakistan now faces the risk of slipping to the bottom tier as incomes stagnate and poverty rises. The economy’s composition is heavily skewed towards consumption (82%), with investment lagging at only 14%, significantly lower than India and China, which invest over 30% of their GDP.

This economic downturn has profound implications for the Pakistani populace, limiting job creation and technological advancement. The industrial sector’s contribution has remained stagnant at nearly 20% for over five decades, compared to a quarter in India and Sri Lanka and a third in Bangladesh, stifling potential growth and export opportunities.

Looking ahead, the government faces mounting pressure to address these economic challenges. Upcoming discussions with the International Monetary Fund (IMF) are expected to focus on implementing reforms aimed at revitalizing investment and fostering sustainable growth. Policymakers must act decisively to reverse the current trends and restore economic stability.