In a region buzzing with economic momentum, Pakistan stands out for all the wrong reasons. Its investment-to-GDP ratio has sunk to 13.8 percent in 2025, the rock bottom among Asian giants, compared to Bangladesh’s healthier 22.4 percent and the 30-plus percent in India and Vietnam.
This isn’t a fleeting dip. From a high of 15.6 percent in fiscal 2022, it fell to 13.1 percent by 2024 before a marginal uptick. The trend reveals persistent failures in creating a business-friendly environment, despite promises of economic steadiness under the current political setup.
Regulatory bottlenecks are front and center. Aspiring industrialists face a gauntlet of 25 approvals, prolonging projects and eroding trust. The much-touted Investment Facilitation Council, designed to cut through red tape, falls short according to business insiders, who decry its overly rigid approach that curbs creative investment strategies.
Trade imbalances compound the woes. Exports nosedived to $2.32 billion in December from $2.85 billion in October, inching up to $3.06 billion in early 2026. High imports at $5-6 billion keep the trade gap yawning wide, pressuring the economy further.
Experts like Mariam Ayub of PRIME cut through the noise: ‘This isolation in investment isn’t about short-term shocks; it’s rooted in entrenched domestic hurdles that even resilient economies overcome.’
Pakistan’s leadership faces a pivotal moment. Breaking free from structural shackles through decisive policy overhauls is essential to rekindle private sector enthusiasm and align with Asia’s growth trajectory.