FINANCE Minister Muhammad Aurangzeb’s statement that the government is moving away from the high-growth strategies that have repeatedly landed us in economic crises must have disappointed those who think in the short term, and were banking on another ‘boom cycle’ for their personal benefit. Speaking at a Pakistan Business Council event on Wednesday, he signalled a break from past patterns and a clear shift in economic direction. The goal is no longer to pursue short bursts of 5-6pc GDP growth that have repeatedly led to instability. “We do not want to repeat the past cycles of unsustainable growth,” he said. Instead, he said that the emphasis was now on heading towards sustainable growth to end boom-and-bust cycles and put the economy on firmer ground. He rightly observed that the real challenge was not to return the economy to the growth trajectory but to maintain the momentum once achieved.

His projections of moderate growth of around 4pc for the next two to three years, potentially reaching 6-7pc over the medium term, represent realistic expectations for an economy as fragile as ours. Pakistan has undoubtedly come a long way from the time it was on the brink of default. However, this hard-won stabilisation, which has come at a huge cost to the people, remains weak and unsustainable. It relies largely on consistent, higher flows of remittances, among other factors, rather than on the economy’s capacity to produce and export goods, agricultural products and services. Even a small push for growth can dismantle this stability. This is evident from the mounting pressure on the external sector, with trade and current account deficits surging rapidly following a modest growth uptick in the first four months of the current fiscal year. There is no denying that conditions are tough for businesses in the organised sector due to steep energy costs, an excessive tax burden, and shrinking demand. But the situation is even tougher for ordinary people who are coping with rising unemployment, declining real wages, and the surging cost of living. Another slide back into a new balance-of-payments crisis simply because real estate speculators and big traders are frustrated with stabilisation policies would be unfortunate. What the economy needs at the moment is productivity, governance and business reforms to find a way out of its current troubles through exports, and not consumption-driven growth fuelled by remittances and debt.

Published in Dawn, November 28th, 2025