Business environment and economic growth outlook
18 January 2024
Published in: Business Recorder
According to the recent report entitled “World Economic Situation and Prospects (WESP) 2024” by the United Nations (UN), Pakistan is projected to experience “moderate economic growth” of 2% in 2024. This growth is anticipated to accelerate to 2.4% by 2025. The report indicates that Pakistan’s economy expanded by 1.7% in 2023. In the future, the inflation rate in Pakistan is anticipated to decline, according to the report.
In December 2023, Bloomberg also asserted that it is projected that Pakistan’s economy will recover, with the Gross Domestic Product (GDP) experiencing a growth rate of 2.1% in the fiscal year 2024. According to the research, the growth rate is expected to increase to 4.8% in fiscal year 2025.
Furthermore, a survey by Gallup & Gilani Pakistan 2024 reveals that this quarter saw a 21% increase in the number of businesses anticipating future prosperity compared to the previous quarter. The score for Net Future Business Confidence has risen by 42%.
It is imperative to mention here that the foundation of SIFC (special investment facilitation council) achieved via collaborative efforts from military leadership, serves to stabilize the economy, enhance the country’s foreign exchange reserves, improve fiscal adjustment, and safeguard critical social spending.
SIFC comprises several vital components. For instance, it encompasses impact investment, wherein financial resources are directed towards enterprises that possess measurable objectives of producing a positive social or environmental influence. The augmentation in business confidence serves as evidence of the successful execution of this objective.
Pakistan’s current account exhibited a surplus of $9 million in November 2023. Between June and October 2023, Pakistan had a 3.2% growth in its economic activity due to the alleviation of supply constraints and an increase in exports and FDI.
The SIFC and military leadership played a vital role in supporting economic recovery through measures such as securing IMF loans, addressing supply bottlenecks, implementing interest rate decreases, and ensuring political stability.
SIFC has meticulously identified pivotal sectors with immense potential for economic expansion. These industries include agriculture, energy, information technology, mining and resource extraction, and defense manufacturing.
The collaboration between SIFC and military leadership aims to tackle important procedural issues, promote policy reforms, and establish an investor-friendly environment by directing foreign investment towards specific industries. The agriculture sector in Pakistan is crucial for the country’s economy.
The agricultural sector of Pakistan is projected to exhibit improved performance in 2024, owing to the expansion of cultivated areas for key crops including rice, cotton, and maize.
International organizations such as the WB, IMF, and FITCH and other rating agencies have expressed their continued confidence in the current economic initiatives and policies. Through the collaborative endeavours of SIFC and military institutions, the nation successfully regained stability in the latter half of 2023. The optimistic outlook for Pakistan in 2024 necessitates the continuation of current economic and structural policies.
The distinguishing factor of the “SIFC” initiative is the recognition that it will function as a permanent single-window operation to eliminate all barriers and bureaucratic inefficiencies. Through their dedication to integrity and openness, the military leadership is making significant progress in revitalising the country’s economy.
To enhance the economy, it is necessary to implement structural changes and exercise careful budgetary management to achieve consistent growth and build resilience against global economic uncertainty. Hence, the indispensable significance of SIFC and military leadership is vital in maintaining these endeavors. The SIFC provides a much-needed boost to the Pakistan’s economy.
The practice of civil-military collaboration on social impact initiatives is not exclusive to Pakistan. Nations across the globe have recognized the benefits of these collaborative efforts. The United States Department of Defense, for instance, has invested in renewable energy initiatives to reduce carbon emissions and enhance energy security.
There are efforts towards protection of indigenous territories, an environmental conservation initiative, in which the military has assumed a prominent position in Brazil. These examples illustrate the significant potential for collaboration between the military and civic sectors in promoting sustainable development and economic growth.
The implementation of a comprehensive strategy to transform Pakistan’s economic indicators must be carried out with unwavering consistency and meticulous attention to detail. Several countries have successfully addressed these challenges by implementing a programme that ensures the absence of unnecessary political intervention in their national affairs. Ghana is an exemplar of a nation that has attained remarkable accomplishments by following a 30-year strategy outlined in its Constitution.
Geshe Kelsang Gyatso, a highly respected Buddhist monk, asserts that by cultivating the ability to patiently accept challenging situations, the underlying issue ceases to exist. SIFC demonstrates its expertise by recognizing the challenges and actively working towards their resolution. The SIFC and military institutions’ persistent devotion to policymaking and effective implementation is a clear indication of their strong dedication to ensuring the stability and growth of the economy.
Given the appealing image and forecast of Pakistan’s economy in 2024, it is imperative to place significant emphasis on economic reforms. It is crucial for the incoming administration, following the February 8 elections, to prioritize and execute the already strong economic policies.
Through the implementation of SIFC and effective military leadership, Pakistan is positioned to gain significant advantages, such as increased energy stability, enhanced investor trust, and potential progress in the power and energy industries.
