Pakistan stands at an economic crossroads, with early stabilisation, a renewed sense of optimism, and a business environment that is beginning to tilt towards growth. After a period of turbulence and uncertainty, the country is witnessing a much-needed shift in sentiment, as captured by the latest Business Confidence Index — Wave 27, released by the Overseas Investors Chamber of Commerce and Industry (OICCI).
The rise in confidence, particularly among foreign investors, is not fleeting. It is a cautiously optimistic response to visible improvements in key economic and governance indicators and reflects a growing belief that Pakistan may be turning the corner towards macroeconomic normalisation, policy consistency, and long-term resilience.
Encouragingly, sentiment across key sectors, particularly manufacturing and retail, has rebounded, supported by improvements in new orders, employment expectations, and investment intentions. Businesses are beginning to look beyond survival and are starting to plan for future growth — a shift that is gradually being backed by capital investment plans.
While the recently achieved macroeconomic stabilisation provides a necessary foundation, it alone is not enough. The real challenge lies in converting this momentum into broad-based, inclusive, and sustainable growth, anchored in a credible and cohesive economic recovery execution roadmap. There are no shortcuts. Structural reforms remain the only viable path forward.
The overall positive business sentiment must be harnessed through a disciplined approach to ensure lasting national growth
Tax reform must be fast-tracked: expanding the base, simplifying compliance, improving enforcement, and removing distortions that hinder competitiveness. Export growth must move beyond traditional segments towards globally competitive and diversified sectors, including services. Manufacturing must be revived through targeted, preferably export-focused, policy, greater participation of local and multinational corporates, and international joint ventures that bring in scale, innovation, and employment generation. The services sector, particularly digital, financial, educational, and health services, must be aligned with global benchmarks and enabled by a skilled, globally deployable workforce.
In parallel, productivity in agriculture must be improved through better land utilisation, access to technology and finance, and farmer support. Similarly, the small and medium enterprise sector, which forms the backbone of employment and innovation, requires urgent facilitation, especially in terms of access to finance and simplified regulation.
Provincial governments will also need to be fully aligned with the national reform agenda. Their active engagement is essential across areas such as tax enforcement, skills training, educational curriculum reform, infrastructure readiness, and investment facilitation. Economic recovery must be a national project with clearly assigned responsibilities and joint ownership across federal and provincial tiers.
Furthermore, as Pakistan’s economy recovers, strengthened collaboration between banks, regulators, and the government will promote a supportive policy environment, help reduce operational costs, enhance sector resilience, enable financial inclusion, and contribute to sustainable economic growth.
To meet the scale and complexity of today’s economic revival expectations, Pakistan must now identify, engage, and activate a high-quality, empowered technocratic team, with both global and local experience, to refine and lead a well-coordinated execution plan. This team must be embedded within the political system and aligned with the economic vision of the government. It may not be an easy task, but it is critical to ensure that the economic revival and growth agenda is centrally managed and effectively delivered.
This expert cohort must lead across key verticals: trade and free trade agreements, industrial and agriculture policy, taxation and digitisation, environment and social governance-linked financing, and inclusive human capital development including gender diversity. Climate resilience must also be embedded in national economic priorities.
All of these must feed into a coordinated medium-term recovery and growth strategy rooted in sustainability and global alignment. Trade policy, in particular, must prioritise expansion and diversification of exports through strategic market access, tariff rationalisation, and integration into global value chains and economic blocs, leveraging smart diplomacy and competitive positioning.
The private sector, particularly multinational companies, must also be repositioned as strategic co-creators in this journey. Beyond capital and employment, they bring deep sectoral expertise, access to export markets, global productivity benchmarks, technology, and resilience in navigating complex supply chains. Their stronger collaboration with local industries can accelerate Pakistan’s shift towards a modern, export-orientated economy.
Equally important is early and meaningful engagement with the private sector, both local institutions and multinationals, at the policy formulation and execution stages. Their commitment, insights, and partnership will be critical in translating plans into real impact and ensuring momentum is sustained.
In tandem, domestic investor sentiment, particularly among mid-sized enterprises, must also be nurtured and enabled. A confident local investment environment often precedes and reinforces foreign investor trust. This segment must be supported with stable policies, access to financing, and simplified governance frameworks.
We must acknowledge the steady and constructive recovery the country has witnessed thus far, but the next phase will require bolder steps, deeper reforms, and a firm commitment to milestone-based execution across all strategic verticals, along with consistency in prevailing economic policies.
The prevailing mood within the business community is visibly much more positive and energised. There is a renewed sense of resolve, openness to collaboration, and a desire to contribute constructively to the country’s progress.
The overall positive sentiment must now be harnessed through a disciplined approach. Pakistan is at a defining inflection point. With investor confidence on the rise, global interest reawakening, and private sector readiness evident, the opportunity before us is real and must be seized as a national priority.
The writer is President of OICCI and President & CEO of Faysal Bank
Published in Dawn, The Business and Finance Weekly, June 2nd, 2025
