Pakistan urged to move beyond economic stabilisation policies

Prime Minister Shehbaz Sharif’s recent remarks acknowledging the economic impact of the US-Iran conflict on Pakistan have renewed debate over the country’s long-standing focus on “economic stabilisation” policies.

Economic experts argue that while stabilisation measures may temporarily protect the economy from immediate crises such as balance-of-payments pressures, currency volatility, and declining foreign reserves, they are not a long-term solution for sustainable growth.

In recent years, Pakistan has repeatedly adopted austerity-driven stabilisation programmes aimed at controlling inflation, reducing imports, and meeting fiscal targets. However, critics say these measures have also slowed industrial activity, weakened consumer purchasing power, and reduced business confidence.

Hadiqa Kiani Awarded Sitara-i-Imtiaz For Contributions To Music

Analysts note that economic growth has remained sluggish despite repeated claims of stabilisation. Many businesses have downsized operations, investment activity has weakened, and unemployment and economic insecurity have increased. Foreign investors have also remained cautious due to concerns over policy inconsistency, weak domestic demand, and uncertainty in the broader economic environment.

Experts stress that genuine economic stability can only be achieved through structural reforms rather than temporary fiscal tightening alone. Key areas identified for reform include tax administration, export competitiveness, governance, industrial modernisation, productivity enhancement, and investment in education and human capital.

They argue that countries that successfully stabilised their economies used adjustment periods to strengthen institutions, diversify exports, and improve industrial competitiveness instead of relying solely on demand suppression and import restrictions.

Pakistan’s economy continues to face recurring challenges whenever growth attempts accelerate, including external account pressures, low export earnings, and dependence on imported energy and commodities. Economists warn that without deeper reforms, the country risks remaining trapped in repeated cycles of crisis management.

The recent Middle East conflict and rising energy prices have once again exposed the vulnerability of Pakistan’s economy to external shocks. Observers say the government must now focus on creating jobs, attracting investment, and expanding productive capacity rather than treating stabilisation as an achievement in itself.