Pakistan needs structural reforms to sustain growth

October 05, 2023 (MLN): As Pakistan's economy grows beyond its potential of around 3-4% growth, the deficit starts rising which dries up foreign exchange reserves and therefore, the nation lands back into a lending program.

A session on ‘Pakistan Economy – Current Challenges and Outlook’ organized by the Overseas Investors Chamber of Commerce and Industry (OICCI) highlighted these pressing concerns of Pakistan's economy.

Dr Farooq Pasha, Economist MENAP, Standard Chartered Bank, Adil Dalal, Head Financial Markets, Standard Chartered Bank, and Samiullah Tariq, Head of Research and Product Development, Pakistan-Kuwait Investment Company (Private Limited) were invited to enlighten the audience on the Macroeconomic update and Energy Sector Issues.

The purpose of this session was to develop an understanding of the current economic challenges and how OICCI members can help address those issues, said a press release issued by OICCI.

Kashif Shafi, Executive Director, OICCI, shared that the economy is a matter of concern for everyone including foreign investors. Therefore, this session was organized to have input from the experts.

One pressing issue discussed during the session was the Increasing circular debt in the power and gas sectors, which necessitates immediate attention.

Furthermore, experts stressed the importance of maintaining the continuity of the IMF program as Pakistan has a history of discontinuing the IMF program before maturity.

They highlighted that while debt restructuring and other measures can offer temporary relief, the key to placing the economy on a sustainable growth trajectory lies in rolling out deep structural reforms.

These reforms should encompass broadening the tax base, opening energy markets to the private sector, privatizing DISCOs, easing the regulatory environment, and keeping fiscal expenditure under the check to control fiscal deficit are the key to put economy on the path of sustainable growth.

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