From Near-Default to Macroeconomic Stability
Prime Minister Shehbaz Sharif has reminded the nation that Pakistan came dangerously close to default in June 2023. Speaking at the Pakistan Governance Forum 2026 in Islamabad, he said the country had been pulled back from the brink through tough decisions and joint efforts by federal and provincial governments as well as the military.
According to the prime minister, inflation that was previously hovering around 35% has now been brought down to below 7%. He also pointed out that the policy rate has been cut to 10.5%, which can help reduce borrowing costs for businesses and consumers. For him, these indicators show that the macroeconomic situation has stabilised, even though the journey ahead remains challenging and requires patience.
What a Whole-of-Government Approach Really Means
PM Shehbaz has called for a whole-of-government approach to deal with Pakistan’s economic challenges. In simple terms, this means that every part of the state — federal ministries, provincial governments, civil service, regulators and public institutions — must work in a coordinated way instead of acting in separate silos.
At the governance forum, he stressed that Pakistan can only secure lasting growth if policies are implemented consistently and all stakeholders pull in the same direction. He argued that the government’s job is not to run businesses but to create an environment in which the private sector, exporters and investors can thrive. This includes removing red tape, improving regulation and providing stable policies.
Key Economic Reforms in Energy, Taxes and Governance
The prime minister highlighted a series of reforms that he described as home-grown, noting that these measures were not dictated by the International Monetary Fund. He said the government wants to break the old boom-and-bust cycle where short periods of growth are followed by crises.
Among the steps he mentioned were a Rs9 per unit reduction in electricity prices, new incentives for solar investment and a crackdown on power theft, which he estimated costs the country around Rs200 billion each year. He also referred to the closure of what he called corrupt or loss-making entities, including the Utility Stores Corporation and the Pakistan Works Department, claiming that shutting these organisations has saved billions of rupees.
PM Shehbaz further pointed to the Ramazan Package, which distributed Rs38 billion to deserving families through digital wallets. He presented this as an example of targeted and transparent support that uses technology to reach the poor while reducing leakages and misuse.
Driving Growth Through Exports, IT and Investment
Looking ahead, the prime minister said Pakistan must focus on increasing exports, investments and foreign direct investment if it wants to unlock its true potential. He underlined that the current tax-to-GDP ratio of 10.5% is too low to support quality public services and infrastructure, and called for widening the tax net instead of overburdening existing taxpayers.
He praised the information technology sector for recording 34% growth and described IT and artificial intelligence as powerful tools that can transform the economy. For him, technical and vocational training is essential so that young Pakistanis can participate in new digital and high-value industries, not just traditional sectors. By building skills and supporting innovation, the government hopes to attract more investment and create better jobs.
Governance Reforms and the $1 Trillion Economy Vision
Planning Minister Ahsan Iqbal, speaking at the same forum, explained that the Pakistan Governance Forum 2026 is meant to develop practical solutions through debate and shared experience. He said good governance must be merit-based, transparent and focused on citizens rather than elites.
Iqbal also highlighted the Uraan Pakistan initiative, describing it as a transitional strategy to move the economy onto a more sustainable and growth-oriented path. He argued that if the transformational agenda is pursued with full capacity and positive synergy, Pakistan could become a $1 trillion economy by 2035.
PM Shehbaz echoed this optimism, saying that Pakistan is rich in resources and talent and can surpass other countries if its people and institutions work together. For him, a whole-of-government approach is not just a slogan but a roadmap for turning short-term stability into long-term prosperity.
