Experts stress long-term economic planning over annual budget fixation

Islamabad: Economic policy and academic experts in a seminar on Monday urged the government to closely align provisions of the upcoming federal budget with the long-term objectives set out in the five-year Uraan Pakistan plan and said the budget should reflect well-considered strategies that ensure inclusive and equitable economic development.

They also emphasised that political stability was essential not only for sustainable economic growth but also for building investor confidence and striving for structural reforms. The experts said in light of the Indo-Pak tensions, it was equally critical that budgetary priorities incorporate related measures such as addressing water management challenges, particularly the Indus Waters Treaty issue.

The seminar, titled Federal Budget 2025-26: Strategic Priorities under Uraan Pakistan and the Shadow of Pakistan-India Tensions, was organised by the Institute of Policy Studies (IPS) here.

IPS chairman Khalid Rahman said the challenge facing the country was not merely economic but rooted in political economy issues and the lack of stability in policy formulation. He underscored the importance of policy continuity across successive governments to foster a stable and trustworthy business environment.

"Recent improvements in economic indicators are commendable. However, short-term economic growth must be translated into long-term development to genuinely address the needs of the broader population," he said. Mr Rahman also highlighted the vital role of the private social sector in contributing to the country’s economic and social well-being.

The other speakers, included former federal finance secretary Dr Waqar Masood Khan, former principal economic adviser to the federal government Sakib Sherani and former joint chief economist Zafarul Hassan Almas, noted that Pakistan was engaged in an IMF programme, the fourteenth since 1988. They said while each arrangement had provided temporary economic stability, translating the short-term relief into sustainable, long-term growth was the fundamental challenge. The warned that without comprehensive structural reforms, the country would remain trapped in the recurring cycle.

The experts said excessive focus on annual budgets undermined strategic economic planning. Crafting a budget without a five- to 10-year vision fails to provide a coherent roadmap for development. In the current geopolitical context, particularly heightened tensions with India, the budget will likely be skewed toward immediate needs rather than long-term priorities, according to them.

While acknowledging recent improvements in the economic outlook, such as lower inflation, a stable balance of payments, a stronger currency, and a rebound in the stock market, the experts warned that those positive indicators stemmed largely from ad hoc measures rather than structural policy shifts.

They said key reforms, including pension system overhauls, must be comprehensive, inclusive and institutionalised. The experts said economic stability, rather than high growth, was the immediate priority.

They, however, said a 4–5% growth rate remained achievable and desirable, even within the constraints of the ongoing IMF program. To reach this goal, the government must significantly enhance export performance by offering targeted incentives and creating a more business-friendly regulatory environment, according to them.

The experts acknowledged Uraan Pakistan as a remarkable strategic initiative on paper but noted that it has yet to show meaningful implementation or visibility in government actions or on the ground. The upcoming budget offers a crucial opportunity to operationalize the plan’s vision. The experts concluded that positioning budgetary decisions with the strategic direction of Uraan Pakistan is essential to boost the export-to-GDP ratio, strengthen the IT sector, promote environmental sustainability and climate resilience, and support a transition to greener energy.