April 18, 2025 – DailyForex.pk
The global economy is undergoing a historic shift. With the United States imposing sweeping tariffs and signaling a departure from multilateralism, international trade is entering uncharted territory. These disruptions are shaking markets, redirecting supply chains, and forcing countries to rethink their economic strategies.
For Pakistan, this reset presents not just challenges — but a once-in-a-generation opportunity to reclaim economic relevance and chart a sustainable path forward.
As global alliances shift and trade flows are restructured, Pakistan’s geographic location and emerging market status can offer it a new role in diversified supply chains. However, to capitalize on this, bold structural reforms are essential.
Pakistan missed the globalization wave that lifted many emerging economies. But the post-globalization reset could offer Pakistan a fresh start — if it acts fast.
There are early signs of recovery:
Yet, Pakistan remains deeply reliant on IMF support, limiting autonomy. A long-term growth strategy must go beyond bailouts — focusing on domestic resilience and competitiveness.
In a world where global exports face tariff headwinds, Pakistan’s remittance flows have hit record highs — crossing $4 billion monthly for the first time. This has positioned remittances to potentially outpace goods and services exports in 2025.
This strength can be a short-to-medium term buffer as Pakistan recalibrates its export and investment strategies.
To drive sustainable growth, Pakistan needs:
The Special Investment Facilitation Council (SIFC) is a step in the right direction, but the focus now must shift from engagement to execution.
The long-delayed privatization of PIA isn’t just a financial transaction — it’s a signal. A sign that Pakistan is ready to confront inefficiencies and adopt a performance-driven governance model.
But success depends on continuity. The same approach must be extended to:
Consumption and borrowing alone cannot deliver long-term prosperity. Export competitiveness is the key — especially as supply chains shift away from China.
Countries like Bangladesh and Vietnam, heavily reliant on U.S. markets, may soon feel the pinch. Pakistan must be ready to step in — but only if it builds capacity now.
With a tax-to-GDP ratio of just 9.5%, Pakistan’s formal sector is overburdened:
Meanwhile, agriculture, real estate, and informal retail — making up over 45% of GDP — remain largely untaxed.
Budget FY26 must prioritize broadening the tax base, removing unfair exemptions, digitizing enforcement, and offering protection to compliant taxpayers.
In 2023 alone, over 800,000 professionals left Pakistan. This isn’t just a migration — it’s a loss of innovation and national capacity.
To bring talent back, Pakistan must:
Pakistan has a chance to redefine its role in a new world order. From remittance-driven resilience to investment-led growth, the building blocks are in place. But what’s needed now is decisive leadership, policy clarity, and execution at scale.
It’s time to revive the spirit of economic ambition that once made Karachi a global commercial hub and PIA a symbol of excellence.
📊 For more economic insights, reform analysis, and policy updates, visit www.dailyforex.pk — your leading source for financial news and market strategies in Pakistan.
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