Qudsia Bano

Pakistan’s improving economic outlook is seen as a chance to reset priorities, but experts caution that the real test lies in turning optimism into action. They argue that focusing on exports and strengthening small and medium-sized enterprises (SMEs) will be crucial for sustaining growth in the months ahead.

Dr Hamid Haroon, a former economist at the State Bank of Pakistan, told WealthPK that export-led growth is not just an option, but a necessity for Pakistan. “Our regional competitors are capturing global markets by giving strong incentives to their exporters, while our SMEs are still struggling with credit access and regulatory hurdles.”

Sharing a similar view, Saima Rauf, a senior research fellow in trade and industry at the Applied Economics Research Centre, University of Karachi, said that the government must use this momentum to ease bottlenecks for small businesses. “SMEs are the backbone of Pakistan’s economy, but they face the highest cost of borrowing and lack proper digital tools to expand. Without addressing these gaps, any growth will remain short-lived,” she said.

Bilal Khan, head of research at Alfalah CLSA Securities, noted that global investors have shown renewed interest in Pakistan, particularly after the recent bond rally. “Market sentiment has improved, but investors will only stay if they see structural reforms that improve export competitiveness and lower the cost of doing business for SMEs,” he explained.

Pakistan’s economy has begun to show signs of recovery, with provisional data indicating GDP growth of 2.7% in FY25, up from 0.2% a year earlier. Business confidence has improved due to monetary easing, a more stable exchange rate, and relatively lower inflation. Auto sales, for instance, jumped by 44% year-on-year in June 2025, reflecting improved consumer demand.

However, experts warn that these signs of growth will not last without deeper reforms. For now, Pakistan’s message of being “open for business” has reached global investors. The challenge, they say, is to make sure that exporters and SMEs on the ground experience the same ease.

Credit: INP-WealthPk