On October 20, 2025, Pakistan reached a pivotal staff-level agreement with the International Monetary Fund (IMF), unlocking $1.2 billion under the Extended Fund Facility (EFF) and Resilience & Sustainability Facility (RSF). This much-anticipated financial inflow is set to bolster Pakistan’s foreign exchange reserves, stabilize its currency, and pave the way for additional support from global partners such as the Asian Development Bank (ADB), World Bank, Islamic Development Bank (IDB), Asian Infrastructure Investment Bank (AIIB), and a host of bilateral lenders. According to The Express Tribune, the agreement also signals to the international community that Pakistan is finally implementing structural reforms in earnest—a crucial step toward lasting economic stability.
Yet, as the ink dries on the IMF deal, a more daunting challenge emerges: how to turn short-term stabilization into long-term, inclusive growth. Economists forecast that Pakistan’s GDP will expand by 3% to 3.5% in the 2025-26 fiscal year, a modest improvement following last year’s devastating flood-related crop losses. Still, this falls short of the 5-6% annual growth rate needed to absorb the country’s rapidly expanding labor force and lift millions out of persistent low-income traps. With a population exceeding 240 million and growing at 2.5% per year, Pakistan must target 6-7% GDP growth to achieve a 4-5% per capita increase—the true litmus test for broad-based prosperity. Anything less, experts warn, could mean stagnation.
Pakistan’s struggle is hardly theoretical. Neighboring India and Bangladesh have managed to sustain such robust growth for over a decade, thanks to disciplined structural reforms, export diversification, and consistent policy frameworks. Their track records show what’s possible when reform isn’t just promised but delivered.
However, as The Express Tribune notes, Pakistan’s economic structure itself poses formidable obstacles. Agriculture still accounts for nearly a quarter of GDP and employs about 37% of the workforce, but productivity remains stubbornly low and highly vulnerable to climate shocks. The sector’s future, analysts say, lies in shifting from subsistence crops to value-added agro-industry—no easy feat, but a necessary one.
Taxation is another persistent headache. Pakistan’s tax-to-GDP ratio hovers around 10%, among the lowest in emerging markets. Entire sectors—including agriculture, real estate, and much of the informal economy—remain outside the tax net, forcing the government to rely heavily on indirect taxes. At the same time, high corporate tax rates discourage investment and business expansion. As a result, capital often chases unproductive real estate rather than factories or exports, reflecting weak incentives and chronic policy inconsistency. Unless this changes, productivity growth will remain elusive.
There are, however, glimmers of hope. Improved diplomatic ties with the West have sparked early interest in mining, minerals, and energy transition projects. While China’s CPEC (China-Pakistan Economic Corridor) initiatives delivered vital infrastructure, most were guaranteed-return projects with limited local employment benefits—exceptions exist, such as the Servis-Long March Tyre joint venture, but they are rare. In contrast, global tech giants like Microsoft, Amazon, Google, and Meta have poured billions into countries like Malaysia, Thailand, Indonesia, and India, lured by predictable regulations, skilled labor, and investment security. For Pakistan to attract similar commitments, it must offer the same level of stability and opportunity.
To shift from stabilization to transformation, The Express Tribune lays out a clear set of policy priorities: rebalance taxation by lowering corporate tax rates to 20-25% and broadening the tax base to include agriculture and real estate; reform loss-making state-owned enterprises (SOEs) that currently drain over Rs500 billion annually from the budget, starting with the privatization of Pakistan International Airlines (PIA); invest in human capital through education and skill-building, especially by enabling greater female labor force participation; encourage productive investment in export-oriented manufacturing, IT, and renewable energy; and treat formal sector job creation as a public good deserving of tax credits or subsidies. Above all, peace and good governance are essential—no economy can thrive amid instability.
Meanwhile, just across the region, Jordan’s industrial sector has been quietly chalking up its own string of successes. As reported by the Jordan News Agency (Petra), the country’s industrial sector has posted eight consecutive months of growth in 2025, sending strong signals of stability and adaptability to both local and foreign investors. The Industrial Production Quantity Index rose by 1.76% compared to the same period in 2024, and August alone saw a 2.07% monthly increase over the previous year. This growth is driven by rising output in manufacturing industries such as chemicals, pharmaceuticals, food, and engineering products, with key export markets like Iraq, Saudi Arabia, and Syria fueling demand.
Industrialists and experts interviewed by Petra credit this momentum to a combination of supportive monetary and fiscal policies, investor confidence, and a strategic focus on modernizing the sector. Eng. Ihab Qadri, representing the leather and garment industries at the Jordan Chamber of Industry, emphasized that the increase in production quantities reflects a genuine improvement in factory output and capacity utilization. He noted, “This development indicates that Jordan’s industrial sector is regaining momentum and operating at higher capacity, driven by growing domestic and external demand.”
Fawaz Al-Shakaa, from the Amman Chamber of Industry, echoed this sentiment, highlighting that the updated base year for the production index (now 2018 instead of 2010) has enhanced statistical accuracy and better reflects the current economic landscape. “The sector has expanded its production base, particularly in several manufacturing fields, which indicates sustained industrial momentum and increasing local and regional demand,” he said.
Mohammad Al-Samadi, Deputy CEO of Al-Emlaq Industrial Group, pointed to the sector’s resilience in the face of global market challenges and supply chain disruptions, noting that the steady and sustainable growth “confirms the sector’s resilience and its ability to manage global market challenges.” Economic expert Dr. Ghazi Al-Assaf added that the industrial sector’s contribution—around 18% of Jordan’s GDP—plays a vital role in supporting the country’s economic stability. Maintaining growth over eight consecutive months, he said, “offers reassurance to investors about the sector’s stability and adaptability.”
Both countries, though facing distinct challenges, underscore the importance of industrial and structural reform in achieving sustainable growth. Pakistan’s path forward requires not just temporary bailouts, but deep-rooted changes in taxation, investment incentives, and governance. Jordan’s experience shows that even modest, consistent gains—backed by policy stability and a focus on modernizing industry—can build investor confidence and create jobs.
As Pakistan stands at a crossroads, the upcoming privatization of PIA will serve as a litmus test for the government’s commitment to reform. Success could mark a decisive break from fiscal hemorrhage and signal to investors that Pakistan is serious about change. For both Pakistan and Jordan, the hard work of inclusive growth is just beginning—but with the right policies and persistence, the rewards could be transformative.
