Mudassar Nadeem
Finance Minister Muhammad Aurangzeb’s recent remarks mark an important and overdue reset in Pakistan’s economic thinking. Speaking at a Pakistan Business Council event, he made it clear that the era of chasing high-growth illusions is over. For decades, successive governments have pursued short bursts of five to six percent GDP growth, only to watch the economy collapse shortly afterwards under external pressure. These cycles enriched a select few, particularly real estate speculators and influential traders, but left the country weaker each time. Aurangzeb’s statement that Pakistan must move away from unsustainable growth models is not just sensible – it is necessary for long-term survival.
The minister rightly emphasised that the real challenge is not accelerating growth, but sustaining it once achieved. Pakistan’s economy has stabilised from the brink of default, but this stabilisation is fragile, expensive, and heavily dependent on remittances rather than genuine economic productivity. The country has been operating on borrowed momentum, not real strength. Any sudden push for rapid expansion can once again dismantle the delicate balance achieved during the past two years. The early months of the current fiscal year already show rising pressure on the external sector, with trade and current account deficits widening in response to even a modest growth uptick.
Growth of around four percent over the next few years, eventually rising to six or seven percent in the medium term, is a realistic and responsible target for a fragile economy like ours. Chasing anything beyond this without structural reforms would trigger yet another crisis. Businesses are already struggling with steep energy costs, unpredictable taxation and shrinking consumer demand. Meanwhile, ordinary Pakistanis face rising unemployment, falling real wages and an unprecedented cost-of-living crisis. For them, another balance-of-payments collapse would be catastrophic.
This is why the minister’s stance must be supported. Pakistan does not need artificial growth driven by import consumption, debt and speculative activity. It needs deep reforms that expand productivity and competitiveness. Our economic revival depends on producing and exporting more goods, services and agricultural output rather than relying on overseas Pakistanis to plug fiscal holes. Sustainable growth will only come when investment flows back into manufacturing, agriculture, technology and value-added sectors. The constant exodus of multinational companies and stagnant foreign investment highlight how unattractive our business environment has become.
The government must therefore complement its stabilisation strategy with governance reforms that reduce uncertainty and red tape. Energy pricing needs transparency and long-term predictability. Tax policy must stop shifting every few months. Exporters require access to stable financing, infrastructure support and market diversification plans. At the same time, the state must incentivise innovation, digitalisation and entrepreneurship, particularly among young Pakistanis who continue to face high unemployment. Without improving productivity, Pakistan cannot break free from its dependence on remittances and debt-driven consumption.
Equally important is the need to rethink the role of elite interests in economic policymaking. Real estate investors and powerful traders have historically pushed for consumption-led, import-heavy growth cycles because they personally profit from them. The country, however, ends up paying the cost through inflation, currency depreciation and external vulnerabilities. Pakistan must resist pressure from these groups and maintain its commitment to long-term stability, even if short-term discomfort persists. Sustainable development requires tough decisions – decisions that prioritise national welfare over narrow commercial interests.
Ultimately, Pakistan’s economic future depends on breaking the habits of the past. Boom-and-bust cycles have repeatedly hollowed out the economy, undermined public confidence and forced the country into humiliating negotiations with international lenders. The only way forward is through reforms that strengthen productivity, governance and exports. Aurangzeb’s approach provides a foundation for this shift, but it requires consistency, political will and institutional discipline. Pakistan cannot afford another reckless growth experiment. Sustainable growth, built on real economic capacity rather than illusions, is the only path that can lead the country toward long-term stability and shared prosperity.
