Govt reveals PM's Economic Transformation Agenda & Implementation Plan

January 15, 2025 (MLN):  The federal government has unvieled the Prime Minister’s Economic Transformation Agenda and Implementation Plan, a comprehensive strategy aimed at steering Pakistan's economy toward sustainable and inclusive growth.

The agenda outlines bold reforms designed to address critical economic challenges and unlock the country’s untapped potential.

Prime Minister Shehbaz Sharif in a statement said that the Hallmark of the PM's Economic Transformation agenda is a focused implementation plan.

The plan aims to cut through the regulatory maze and carry out market-based reforms, while also targeting critical barriers like high power costs (by developing competitive markets through enabling wheeling mechanism) and doing away with messy public sector management of the sector.

For export growth, the plan aims to gradually lower tariffs in line with regional and international benchmarks, paving the way for the integration of reforms in regional and global value chains.

Potential new opportunities for exports like agriculture products and IT have been factored into the Transformation agenda.

For public finances, the plan has a sharp focus on reducing public debt, with the reasonable target of raising tax-to-GDP, mostly through efficiency gains and broadening of the tax base.

Right-sizing of government is already a top-priority area, and this plan captures this urgency, adding an ambitious privatization plan as a key deliverable.

If this agenda is implemented, the following realistic outcomes will be achieved. 

The 13th Five-Year Plan (2024-29), prepared by the Ministry of Planning and approved by the NEC, targets the creation of 10 million jobs over the next five years.

The aim is to generate 1 million additional jobs annually by FY28, focusing on higher productivity through increased private-sector investment.

The plan sets an ambitious target of 6% annual GDP growth by FY28, ensuring sustainable economic progress without a balance of payments crisis after the conclusion of the IMF program. The 5Es framework envisions tripling the economy over the next decade, reaching a GDP of USD 1 trillion.

Private investment is expected to grow by an additional USD 10 billion annually by FY28, raising the private sector's share in GDP to over 15%. This will be driven by domestic and foreign direct investments, contributing an additional percentage point to annual GDP growth.

Exports are projected to increase by USD 20 billion annually by FY28, resulting in a cumulative rise of USD 60 billion over five years.

This will boost the export share of GDP from the current 10% to 15%, with the 13th Five-Year Plan targeting total exports of USD 63 billion in goods and services.

Public finances are set to improve, with the tax-to-GDP ratio rising to 13.5% by the end of the IMF program.

A broad and fair tax base will support this goal, alongside reforms to reverse biases in tax and import tariffs that currently hinder export-oriented sectors.

Debt management will also be prioritized under the three-year IMF EFF program, initiated with a staff-level agreement in July 2024.

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