Work in progress

Pakistan's State Bank governor, Jameel Ahmad, has offered an optimistic outlook for the economy, projecting GDP growth to accelerate from 3.7% in the last fiscal year to between 3.5% and 4.5% in the current year. Ahmad attributes this expected improvement to greater fiscal discipline. However, this assessment must be viewed within the context of the underlying economic realities. While the transition from stabilization to sustainable growth is critical, it remains in its nascent stages.

The projected growth range itself is telling. At the lower end, growth would actually slow down compared to the previous year. Even the upper limit of 4.5% represents only a modest recovery for an economy grappling with a rapidly expanding population, rising underemployment, and significant unmet investment needs. The current stability has been largely achieved through measures such as restrained domestic demand, tighter fiscal management, subdued imports, and an improved external position bolstered by debt rollovers and borrowings.

While these measures are essential for achieving economic stability, they do not inherently create the conditions for durable economic expansion. The underlying economic structure remains vulnerable, and a significant portion of the population continues to face economic challenges. The governor's optimistic assessment, therefore, needs to be balanced against these persistent issues and the fragility of the current recovery.

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Mr Jameel Ahmad expects GDP growth to accelerate from 3.7pc in the last fiscal to between 3.5pc and 4.5pc in the current year, with the economy benefiting from greater discipline.