PIAF Urges Urgent Structural Reforms as Pakistan Faces Slow Growth and Rising Debt

Lahore, Pakistan — The Pakistan Industrial & Traders Association Front (PIAF) has called on the government to implement decisive structural reforms to address the country’s stagnant economic growth, rising domestic debt, and widening trade deficit. PIAF warned that without bold and comprehensive action, economic vulnerabilities will deepen, investor confidence will remain weak, and sustainable development will remain out of reach.
In a joint statement, PIAF Chairman Faheemur Rehman Saigol, Senior Vice Chairman Nasrullah Mughal, and Vice Chairman Tahir Manzoor Chaudhary said Pakistan’s real GDP growth is projected at only 2.6 to 3 percent for fiscal year 2025-26, reflecting persistent structural weaknesses and climate-related shocks, including recent floods that significantly affected agricultural output.
The leaders highlighted that high domestic borrowing and weak tax revenue collection are limiting the government’s capacity to expand public services and promote productive investment. They emphasized that unless the tax base is broadened and direct taxation strengthened, the fiscal deficit will continue to constrain long-term economic prospects.
PIAF also pointed to a widening trade imbalance, with imports outpacing exports, and urged structural reforms in the power sector to tackle decades-old circular debt, reform inefficient state-owned enterprises, reduce energy losses, and improve policy predictability to enhance business competitiveness and export growth.
Water scarcity was flagged as another major concern, with Pakistan remaining one of the world’s most water-stressed countries. The association stressed that addressing long-term water management and infrastructure issues is critical to support agriculture and industrial growth.
While welcoming initiatives to attract foreign investment, Nasrullah Mughal noted that such measures cannot replace fundamental macroeconomic stability and structural reforms. Tahir Manzoor Chaudhary emphasized that decades of reports recommending necessary reforms have largely been ignored, stifling productivity and delaying economic transformation.
PIAF urged the government to develop a comprehensive national economic strategy linking fiscal management, tax reform, trade facilitation, and industrial policy, with greater private-sector involvement in policymaking.
Despite challenges, some sectors are showing resilience. Key manufacturing segments have seen modest growth, and foreign investment flows from international partners indicate confidence in Pakistan’s market potential—provided structural reforms are implemented.
The association warned that without reforms in taxation, governance, energy, and water resource management, Pakistan risks continued economic underperformance relative to regional peers. PIAF called on policymakers to present clear, credible, and measurable strategies in upcoming budgets and development plans to ensure sustainable and inclusive growth.