ISLAMABAD – The financial sector reforms introduced by the Shehbaz Sharif administration over the past year have had a significant impact, addressing key economic challenges and laying the groundwork for long-term growth. However, critical issues remain, including tax base expansion, sustainable debt management, increased SME financing, and stronger regulatory enforcement.
These insights are part of The Pakistan Reforms Report 2025, recently released by Mishal Pakistan. The report evaluates reforms implemented between January 2024 and February 2025, covering governance, economic stability, and social inclusion.
The report reviews over 120 reforms initiated by the government in 2024. While it does not assess the effectiveness of these measures, it documents their legal and structural impact on the country’s economic, social, and political landscape.
One of the biggest challenges identified is the polarization following the 2024 general elections, which were marred by allegations of electoral anomalies. This has led to a fragmented governance environment where opposition parties and public resistance have complicated policy implementation.
Pakistan’s digital transformation stands at a crucial turning point. While regulatory reforms and infrastructure projects have bolstered the country’s digital economy, concerns remain regarding internet restrictions, cybersecurity enforcement, and bureaucratic inefficiencies. The report emphasizes the need for a balanced approach—prioritizing security while preserving online freedom, facilitating investment while ensuring consumer protection, and fostering innovation without excessive regulation.
The National Accountability Bureau (NAB) has made strides in improving transparency, but concerns persist over selective investigations. Observers have called for a more consistent and impartial approach to accountability, with clearer distinctions between political influences and investigative priorities. Strengthening procedural safeguards is deemed essential for credibility.
Similarly, the Competition Commission of Pakistan (CCP) faces challenges. Despite recovering Rs. 100 million in penalties over the past year, its enforcement remains largely symbolic due to weak sanctions, slow adjudication, and insufficient legal backing. The planned construction of a CCP headquarters in Islamabad, set for March 2025, has also sparked debate. While it could save Rs. 110 million annually in leasing costs, critics argue that the commission should prioritize regulatory efficiency over infrastructure investments.
The deregulation of the Inland Freight Equalization Margin (IFEM) marks a significant shift, aimed at attracting foreign investment in fuel transportation infrastructure. However, the report warns that while competition may improve efficiency, regional price disparities could disproportionately impact rural consumers. Policymakers must ensure fair pricing mechanisms to avoid economic imbalances.
Similarly, the privatization of distribution companies (Discos) has the potential to enhance efficiency in the energy sector. Yet, structural and political hurdles remain, particularly in public-private partnerships (PPPs), where foreign investors remain hesitant due to complex regulations. Meanwhile, Pakistan’s green bond market is still in its infancy, with the transition to sustainable finance progressing slowly.
Law and order reforms have gradually improved security, governance, and investor confidence. However, concerns persist over potential overreach, with the report stressing the need to balance security measures with civil liberties.
The Ministry of Law and Justice has taken notable steps to modernize Pakistan’s legal system. However, the report cautions that these reforms will only be effective if they are implemented transparently, regularly reviewed by the judiciary, and gain public trust.
The Pakistan Reforms Report 2025 highlights the significant strides made in economic management, digital transformation, and governance reforms. However, challenges such as policy resistance, regulatory inefficiencies, and gaps in enforcement require continued attention. Sustainable progress will depend on transparent implementation, strategic investment, and the government’s ability to navigate political and economic complexities.
