EVERY economic slowdown in Pakistan revives the expectation within the business community that some incentives will quickly restore growth. This expectation is understandable, but it is misplaced. Pakistan’s growth challenge is not cyclical; it is structural. And structural weaknesses do not yield to quick fixes.
The growth record offers a sobering benchmark. Over the past 15 years, Pakistan’s average real GDP growth has remained around 3.5-4 per cent — barely enough to absorb population and labour-force growth, let alone raise productivity or incomes. Current growth is therefore not an aberration caused solely by recent shocks. It reflects a long-standing failure to escape a low-growth equilibrium.
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