Archive · 9 Jan 2026
Pakistan's Economic Stagnation Due to Uncertainty
Pakistan's economy is not doing well because there are too many uncertainties in how the country is run.
Even though there is enough money in the banks and the currency is stable, people and businesses are not borrowing or investing as much as they should.
This is because they don't feel confident about the future.
The government has a lot of debt, and it's getting harder to pay it back.
Also, money from other countries is leaving Pakistan, which makes things even more difficult.
The government needs to create a better environment for businesses and investors to help the economy grow.
Lack of fiscal and legal certainty is a key factor in Pakistan's economic stagnation.
Private sector lending dropped by 90.8% from July to December 2025.
Net foreign direct investment (FDI) fell by 25.4% year on year.
Central government debt reached Rs 76,980 billion in October 2025, with a debt-to-GDP ratio of 67.12%.
The current account position deteriorated by $1.315 billion, resulting in an $812 million deficit.
- Who
- Pakistan's government and economy
- What
- Economic stagnation due to lack of fiscal and legal certainty
- When
- July-December 2025 and July-November FY2026
- Where
- Pakistan
- Why
- Uncertainty in fiscal, legal, strategic, and administrative frameworks
- Currency in circulation increase (July-Dec 2025)
- Rs 432 billion
- Private sector lending drop (July-Dec 2025)
- 90.8%
- Net FDI decline (July-Nov FY2026)
- 25.4%
- Total net foreign investment decline (July-Nov FY2026)
- 77.5%
- Current account deficit (July-Nov FY2026)
- $812 million
- Central government debt (October 2025)
- Rs 76,980 billion
- Debt-to-GDP ratio (October 2025)
- 67.12%
- Domestic debt servicing burden
- 13.7% of federal expenditure