The Pakistan Business Council (PBC), the leading voice for corporate advocacy in the country, has identified five critical areas that need urgent attention to ensure Pakistan’s continued economic stability after recent gains. In a statement released on social media, the PBC acknowledged the government’s efforts in 2024 to stabilize the economy, despite political challenges.

While the country secured a long-term program with the International Monetary Fund (IMF) in July, which protected it from debt risks, Pakistan’s economy benefited from falling fuel costs, inflation reduction, and a rise in remittances. The PBC noted that the formal sector’s tax burden increased post-budget, but borrowing costs decreased, providing some relief.

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However, the PBC raised concerns over several major issues that need to be addressed to maintain stability:

1. Avoiding Economic Setbacks: Past IMF agreements have shown that initial stability often reversed due to fiscal and monetary policies driving import demand. The government and business sectors need to manage this risk carefully.
2. Urgency of Reforms: Delaying crucial reforms could undermine future progress. The government must unify its leadership, resolve internal conflicts, and prioritize privatization and streamlining the public sector.
3. Tax Revenue Shortfalls: Failure to meet tax targets could place more pressure on existing taxpayers, particularly salaried employees. The Federal Board of Revenue (FBR) needs to improve its engagement with taxpayers.
4. Energy Sector Challenges: Energy costs, availability, and reliability remain key hurdles. Without addressing these, Pakistan’s manufacturing sector will struggle to compete, and job creation will be stunted.
5. Trust Deficit with Business Community: Issues like the extrajudicial treatment of Independent Power Producers (IPPs) continue to harm both local and foreign investment. The government must restore trust to foster public-private partnerships.

The PBC also suggested leveraging underutilized sectors without requiring new investments or imports, as well as taxing agriculture and property. Empowering local bodies is another step toward achieving greater economic stability.

To sustain and build upon recent successes, the PBC emphasized the need for clear leadership, a commitment to reforms, and openness to fresh ideas. Continuing with old practices will not yield significantly different results.