Economists flag high production costs, low exports as key risks for Pakistan in 2026
KARACHI: Pakistani economists and business leaders urged the government on Wednesday to cut high production costs, arrest inflation and increase exports to capitalize on macroeconomic gains in 2025 as the country prepared to ring in the new year.
Prime Minister Shehbaz Sharif this week highlighted his government’s economic achievements over the past two years, saying that inflation had fallen from 29.2% to 4.5%, while foreign exchange reserves had more than doubled from $9.2 billion to $21.2 billion.
While Pakistan reported some economic gains during the year, such as comparatively low inflation, a $100 million current account surplus in November and a strong performance by the stock market, economist Sana Tawfik said deeper reforms were still needed to address pressing economic issues.
“When we talk about stability and growth, we cannot deny that there are challenges in the economy,” Tawfik, head of research at Arif Habib Limited, told Arab News. “High energy tariffs, interest rates and the broader cost of doing business need to be addressed if Pakistan wants to sustain growth, boost exports and attract foreign investment.”
