IMF, ADB, FCDO and UN representatives call for provincial tax reforms, lower business costs, energy sector restructuring, export competitiveness and improved governance to sustain economic growth.
Pakistan must move beyond macroeconomic stabilisation and accelerate structural reforms to achieve sustainable economic growth, attract investment and improve productivity, International Monetary Fund (IMF) Resident Representative Dr Mahir Binici said on Thursday.
Speaking at the closing plenary of the 29th Sustainable Development Conference, organised by the Sustainable Development Policy Institute (SDPI), Binici identified provincial tax mobilisation, governance improvements, energy sector restructuring and lower business costs as critical reform priorities.
He said Pakistan had undertaken the difficult task of restoring macroeconomic stability, but sustaining these gains required consistent and well-sequenced structural reforms.
Binici outlined five priorities: preserving macroeconomic stability, improving resource allocation, reducing the cost of doing business, developing a growth-friendly fiscal system and strengthening governance.
He stressed that emerging and developing economies needed to mobilise revenues equivalent to at least 15 per cent of GDP to provide essential public services. Pakistan remained considerably below this benchmark.
He urged provincial governments to expand their tax bases through harmonisation of General Sales Tax (GST) on services, agricultural income taxation and property taxation, arguing that revenue mobilisation should not remain limited to federal taxation.
The IMF representative also called for greater spending on productive infrastructure, healthcare, education and targeted social protection instead of inefficient and preferential activities.
He identified governance, national tariff policy and improvements in the business environment as major areas where Pakistan could unlock economic growth. High energy costs, taxation and multiple layers of taxes were discouraging investment and foreign direct investment (FDI).
Former federal minister Syed Naveed Qamar warned that Pakistan’s inefficient energy system was pushing consumers towards alternative sources, particularly solar power.
He said consumers were increasingly “voting with their pockets” by abandoning the national electricity grid.
Qamar also criticised policies that encouraged industries to shift from gas to electricity, saying circular debt had effectively moved from the power sector to the gas sector without resolving underlying inefficiencies.
He advocated deregulation and greater market competition, arguing that allowing more companies to enter the electricity market could produce faster results than privatisation alone.
He further warned that Pakistan could face renewed economic instability after the current IMF programme concludes in September 2027 unless the government prepares a sustainable, growth-oriented economic framework.
Qamar cautioned that the period leading up to the next general elections could create pressure for increased public spending and a reversal of economic discipline.
He also called for education sector reforms, arguing that policymakers had focused excessively on enrolment figures rather than learning outcomes, practical skills and workforce productivity.
Asian Development Bank (ADB) Country Director in Pakistan Dr Emma Xiaoqin Fan said consistent reforms, macroeconomic stability and private-sector-led growth were essential to break Pakistan’s recurring boom-and-bust cycle.
She urged the government to establish clear responsibilities for public and private sectors, improve civil service accountability and reduce unnecessary bureaucratic procedures.
Fan said privatisation, including the sale of Pakistan International Airlines (PIA), could not transform the economy without broader and consistent reforms.
Meanwhile, Sam Waldock, Development Director at the Foreign, Commonwealth and Development Office (FCDO), British High Commission Islamabad, identified export competitiveness as essential to overcoming Pakistan’s recurring growth ceiling of around 3.8 per cent.
He called for regulatory reforms, trade facilitation, export promotion, market-oriented skills development and improved access to foreign exchange for exporters.
Waldock highlighted weaknesses in certification, documentation and branding, noting that Pakistan’s surgical instruments industry lacked laboratories certified to facilitate medical-device exports to the European Union.
Pernille Ironside, Acting UN Resident Coordinator and UNICEF Country Representative, said reforms should be judged by their impact on people’s lives rather than policy announcements or budget allocations.
She called for outcome-based public spending that delivers better schools, effective healthcare and inclusive employment opportunities.