A quick review of Pakistan’s economic history reveals that episodes of strong economic growth in the 1960s and then in 1980s were both followed by the slowdown in growth and weaknesses in macroeconomic indicators. Why is Pakistan vulnerable to these cyclical downturns? Why cannot the country have sustainable economic performance?
The oscillating growth performance over the years is largely because of inherent domestic structural rigidities which have yet to be effectively tackled to ensure macroeconomic stability and the desired growth path. Proper diagnosis and effective resolution of issues and implementation of broad ranging structural reforms is critical to skirt such bouts of slowdown in growth and instability.