Economic stability 'borrowed': Iqbal

Planning Minister Ahsan Iqbal has described Pakistan's economic stabilisation as stunted and borrowed, according to The Express Tribune, and urged Prime Minister Shehbaz Sharif to change the growth path before the election cycle begins. In a detailed memo, he proposed an eight-point Growth Compatible Fiscal Stabilisation Framework, arguing that recent gains rest on cutting development spending and borrowing more rather than widening the revenue base and lifting exports.

Iqbal cautioned that the approach could improve fiscal figures today but would weaken the productive capacity needed to sustain them tomorrow. The report noted that federal development spending dropped from 2.6% of GDP in 2018 to 0.8% this fiscal year, and that the finance ministry did not reply to the criticism. Official figures cited show growth of 3.7% last fiscal year, unemployment at a 21-year high of 7.1%, exports down nearly 6% and foreign direct investment down 34% to $1.6 billion.

Iqbal urged the finance and planning ministries to identify the 2029 growth rate Pakistan is heading towards, the rate it needs, and the policy changes required to close the gap. He also asked that the finance ministry present the prime minister and cabinet with a post-IMF medium-term scenario through FY2028-29. Further cuts to development spending, he warned, would damage Pakistan's potential growth.