Pakistan stands back on its feet

March 05, 2025 (MLN): Not long ago, Pakistan was on the brink of default, with investor confidence plummeting. However, a comprehensive stabilization program, backed by a $7 billion International Monetary Fund (IMF) bailout secured last summer, reversed the economic downturn.

The economy is now showing clear signs of recovery as interest rates have declined, investments are picking up, and foreign reserves are stabilizing. Cherry on the top, rallying stock market further signals renewed optimism.

Adding to this momentum, the launch of the Uraan Pakistan initiative aims to foster long-term economic resilience, signaling a new chapter of recovery and growth.

Key investors and corporate leaders have shared their perspectives on Pakistan’s economic revival, emphasizing the turnaround, stability, and the way forward for the country’s economy.

The economic conditions in Pakistan are getting better and stable, with market capitalization increasing from $25bn to $50bn, noted the CEO of Tabba Group.

Certainly, the IMF program, small grants, and increased remittances have played a significant role. Privatization must be taken forward, and most importantly, there is a need to broaden the tax base, stated the CEO of Pakistan Business Council.

With this, there will be enough resources to spend on socio-economic development, he added.

Hussain Dawood, Chairman of Engro/Dawood Group, emphasized the government’s vision of transforming Pakistan into a $1 trillion economy by 2029. However, he stressed the need for substantial infrastructure development within the country to achieve this ambitious goal.

Aamir Pracha, CEO of Unilever Pakistan, pointed to three crucial aspects of economic improvement including fiscal consolidation, monetary tightening, and administrative crackdowns on smuggling and money changers, which have had far-reaching effects.

Kaan Terzioglu of VEON Group highlighted the budget surplus achieved for the first time in 17 years and the lack of currency devaluation over the past 20 months. He credited these achievements to disciplined execution of fiscal and monetary policies.

People used to say Pakistan was on the brink of default. The stock market previously traded at a P/E multiple of 1.5 to 2 times. Today, it stands at 5.6 times, yet it remains discounted compared to its historical average," said the CEO of the PSX.

“I can say with confidence that 2025 will be a much better year from a foreign investor's perspective”, he added.

In 2024, many positive developments have taken place in the economy. Due to these trends and government policies, the stock market has reacted positively, and both local and foreign investors are showing interest, said the President of the National Bank of Pakistan.

After a long time, we have more to compliment than to complain about. 2024 was a year of economic stability. The downward trend that persisted for many years, particularly in foreign exchange reserves and the exchange rate, has now stabilized, remarked the CEO of Jazz.

Businessmen believe that the economy is moving toward revival. With Rs29 trillion invested in Pakistani banks, the interest rate has been a key factor influencing these deposits, said Hasan Bakhshi, Chairman of ABAD,

As interest rates approach 7-8%, this money is expected to be withdrawn and re-enter the economy, he added.

He outlined the housing and construction industry, where all stakeholders, from buyers and sellers to builders, rely on Pakistani products such as cement, iron bars, and steel.

He urged Shehbaz Sharif and his team to navigate the economy effectively, expressing confidence that Pakistanis will engage in their businesses, move past previous challenges, fulfill their professional responsibilities, and contribute to the country’s progress.

Arif Habib, Chair of AH Group, highlighted that the year 2020 was one of the best years for Pakistan’s economy.

The stock exchanges experienced notable growth, foreign exchange reserves increased, and business confidence saw considerable improvement, indicating substantial progress. This stability is expected to further enhance economic conditions in 2025, Arif Habib noted.

Atif Ikram Sheikh, President of the Federation of Pakistan Chamber of Commerce and Industry, highlighted the significant decrease in the interest rate, which was previously at 23% and has now dropped to 13%, with expectations of further reductions.

This decline has contributed to economic improvement, and the government's consistent policies have restored confidence, fostering investment and industrialization, he added.

Macroeconomic indicators have been showing progress for some time, and the future will bring even better opportunities for investment and the business sector in Pakistan, said Usman Shoukat, President of the RCCI.

Javed Balwani, President of KCCI, described 2024 as a successful year for Pakistan. He pointed out that the current account surplus in October reached $349 million.

Considering these developments, he stated that industrialization in Pakistan is gaining momentum. He emphasized that those who had lost hope are now seeing renewed optimism for the future of industries and businesses in the country.

Mian Abuzar Shah, Chairman of LCCI, stated that Pakistanis abroad have started remitting funds and foreign currency through banks, leading to a rise in targets from $25bn to an expected $35bn or more.

He projected that if this trend continues over the next 25 years, remittances could surpass $40bn.

He also noted that the Pakistani rupee has appreciated by 21% for the first time in history, attributing it to a stable government. A declining markup rate, he said, is a strong indicator of economic momentum.

Abdul Aleem, CEO of OICCI, remarked on Pakistan’s economic recovery, emphasizing the increase in foreign exchange reserves from $3bn to $12bn and improved ratings from international agencies. He observed that the balance of payment situation is improving.

“We are moving towards growth under the leadership of Prime Minister Shahbaz Sharif with a focus on enhancing private investment, boosting exports, and optimizing public finances”, said the Federal Minister for Finance and Revenue, Muhammad Aurangzeb.

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