By Yousuf Nazar
Pakistan鈥檚 economic trajectory over the past decade reflects enduring policy missteps and leadership failures. Since 2013, the country has averaged just 3.5 per cent GDP growth annually, significantly trailing regional peers. During the same period, the external trade deficit has persistently hovered around 7鈥8pc of GDP, financed increasingly by external borrowing. These dynamics underline deep structural imbalances rather than transient fiscal shortfalls.
The International Monetary Fund鈥檚 2024 Extended Fund Facility of $7 billion mandated a sharp increase in Pakistan鈥檚 tax-to-GDP ratio, which has remained stagnant around 9鈥10pc for years. While raising revenues is important, Nobel laureate Milton Friedman cautioned that 鈥渢he government solution to a problem is usually as bad as the problem and very often makes the problem worse鈥, highlighting the risks of blanket tax hikes without addressing underlying economic weaknesses.
Indeed, the central challenge for Pakistan is not revenue mobilisation alone but