ISLAMABAD
The Pakistan Industrial & Traders Association Front (PIAF) has called on the government to adopt decisive structural reforms as the country’s economy continues to struggle with slow growth, rising domestic debt, and a widening trade deficit.
PIAF leaders warned that without bold action, economic vulnerabilities will deepen, investor confidence will remain weak, and sustainable development will remain out of reach.
The leaders highlighted that low economic growth, combined with high domestic borrowing, has limited the government’s ability to expand public services and promote productive investment. Weak tax revenue collection has forced Pakistan to rely heavily on domestic and external financing to meet expenditures, further increasing debt pressures.
PIAF Chairman Faheemur Rehman Saigol, along with Senior Vice Chairman Nasrullah Mughal and Vice Chairman Tahir Manzoor Chaudhary, said in a joint statement that Pakistan’s growth has remained modest despite some recent policy efforts. Real GDP growth is projected to stay around 2.6 to 3 percent for the fiscal year 2025‑26, reflecting persistent structural weaknesses and the impact of climate shocks, including recent floods that affected agricultural output.
They emphasized that unless the government broadens the tax base and moves toward more direct taxation, the fiscal deficit will continue to constrain long‑term economic prospects. The association also pointed to the continuing trade imbalance, noting that imports have outpaced exports, causing the trade deficit to widen sharply in recent months.
PIAF urged the government to address structural bottlenecks in the power sector, citing the decades‑old circular debt that has grown into multi‑trillion‑rupee liabilities. Reforming inefficient state-owned enterprises, reducing energy losses, and improving policy predictability are essential to reduce costs for businesses and enhance export competitiveness.
Water scarcity was identified as another major challenge. Pakistan remains one of the most water-stressed countries in the world, and ongoing management and infrastructure issues are reducing water availability for agriculture and industry, both critical drivers of growth. PIAF stressed that addressing this long-term threat is essential to secure economic stability.
While initiatives to attract foreign investment are welcome, Nasrullah Mughal cautioned that such measures cannot replace fundamental macroeconomic stability and structural reform. Foreign direct investment will flow only if Pakistan demonstrates strong economic fundamentals, stable growth prospects, and sufficient foreign exchange reserves.
Tahir Manzoor Chaudhary emphasized that structural reforms are critical and that decades of reports outlining necessary changes have largely remained unimplemented, stifling productivity and delaying meaningful economic transformation.
