Pakistan has heard grim economic forecasts before, but rarely has the warning come this bluntly from the country’s own central bank governor. State Bank of Pakistan’s chief Jameel Ahmad’s declaration that Pakistan’s growth model is “unsustainable” for a population of 250 million is not just another technocratic caution, it is an indictment of a system that has been allowed to inch toward breakdown under successive governments.
His remarks, delivered at the Pakistan Business Council’s Dialogue on the Economy, arrive at a moment when the country is already suffocating under soaring poverty, historic unemployment, and a prolonged phase of stabilisation that has crushed households and businesses alike. Pakistan may have been living on borrowed time. Now, its chief banker is saying the clock has all but run out.
A growth collapse decades in the making
Ahmad’s words come against the backdrop of decades-long economic stagnation. Growth has been grinding downward, from an average of 3.9% over the past 30 years, to 3.5% over the past 20, to just 3.4% over the last five.
These are not fluctuations, they are a structural decline. The governor’s diagnosis is stark: Pakistan’s economic model, built on consumption spurts, cyclical borrowing and stopgap stabilisation, cannot support the needs of 250 million citizens. Its business cycles are shortening, and each recovery is weaker than the one before.
Yet these warnings have been repeated for years by economists, think tanks and businesses, only to be ignored by policymakers more interested in short-term political optics than long-term economic sustainability. Ahmad’s arrival at the same conclusion only highlights how prolonged denial has made a difficult situation far worse.
People paying the price
At the heart of the governor’s speech lies an undeniable truth: stabilisation has become a lifestyle, not a phase.Pakistan has been locked in a cycle of “corrections,” each accompanied by suffocating taxation, punishing energy tariffs and deep cuts that hit ordinary citizens hardest. With each round of stabilisation, the cushion for households and industries shrinks, while the structural defects that make stabilisation necessary remain untouched.
The consequences are predictable and devastating. Unemployment has climbed to a 21-year high of 7.1%. Millions are unable to find work in an economy that can no longer extend opportunities. Poverty, according to the World Bank, has surged to 44.7% ; a number that speaks not just of economic weakness but of a state failing its most basic responsibilities.
Against this backdrop, it is hard to avoid the sense that the “growth model” the governor criticises has long been propped up by wishful thinking more than planning.
Political finger-pointing, instead of accountability
Despite the severity of the crisis, the government’s political establishment continues to take refuge in blame games. Planning Minister Ahsan Iqbal, speaking just a day before Ahmad’s remarks, laid Pakistan’s unemployment crisis at the feet of the International Monetary Fund. According to him, IMF stabilisation measures, along with climate disasters, are responsible for choking growth.
The claim is convenient. It is also deeply selective. Pakistan did not arrive at this economic precipice because of one IMF programme. It arrived here after decades of undisciplined spending, lopsided tax structures, institutional decay, elite capture and an addiction to external bailouts.
The IMF’s stabilisation programmes are symptoms of failures not their cause. Ahmad’s remarks stand in sharp contrast to the minister’s narrative. His admission that the model is broken suggests that Pakistan’s problems are homegrown, systemic, and long-standing; not imported from Washington.
A country trapped between stabilisation and stagnation
The governor’s point about the prolongation of stabilisation is one the government prefers not to dwell on. For Pakistan, stabilisation has ceased to be a temporary correction. It has become the only consistent phase of economic management. A permanent condition, not a transition.
Every few years, the script repeats: the country runs out of reserves, inflation spirals, the currency slumps, and the IMF is summoned for another rescue package. Stabilisation measures follow, growth collapses, poverty spikes, and once the crisis abates, the cycle begins again. What Ahmad’s speech implicitly acknowledges is that this cycle is now tightening.
Stabilisation measures are imposing harsher burdens, but the intervals between crises are shrinking. The country is stuck in a narrowing corridor — unable to tolerate stabilisation, yet unable to function without it. This is the model he calls unsustainable. And he is right.
A warning without a roadmap
Although the governor urged long-term policymaking, he did not lay out a path for it — a conspicuous omission that underscores the complexity of the challenge. His speech dwells largely on what Pakistan must move away from rather than what it must move toward. He warned the private sector against prioritising short-term profits. He spoke of the need for a shift in regulatory approaches. He criticised reliance on consumption-led growth. But he avoided offering specific direction on how an economy deeply constrained by fiscal realities, political instability and institutional weakness might begin that transition. What remains is an unsettling question: if the central bank chief cannot outline a way out, who can?
A mirror to the policymakers
Ahmad’s remarks cast a long shadow over the political class. His speech was not just an economic critique; it was a quiet rebuke of decades of poor governance, delayed decisions and economic management shaped more by political survival than national longevity. The message is implicit but unmistakable: Pakistan’s growth model has failed because the state failed to build one that could succeed.
The country’s reliance on temporary fixes has created structural vulnerabilities that now appear too entrenched to ignore. The consequences are unfolding in real time — joblessness, poverty, shrinking industries, falling productivity and a generation of Pakistanis being pushed out of economic relevance.
The numbers tell their own story
- A population of 250 million.
- Growth is hovering around 3%.
- Unemployment is at a two-decade high.
- Poverty is approaching 45%.
These numbers do not describe a crisis on the horizon; they describe a crisis already underway. The central bank governor’s speech, for all its diplomatic phrasing, is a recognition that Pakistan is approaching the limits of its existing economic trajectory. The country’s economic engine is slowing. The social fabric is fraying. And the policymakers’ playbook has run out of pages.
A country running out of time
For years, Pakistan has responded to economic deterioration with stopgap measures, international loans and hopeful rhetoric. Ahmad’s latest warning strips away that façade. It signals that Pakistan is not simply performing below potential; it is structurally incapable of sustaining its population under the current model.
His message is a reminder that Pakistan’s economic crisis is not cyclical, not temporary and not recoverable through cosmetic fixes. It is foundational. The question now is not whether the current model can work, it cannot. The question is how long Pakistan can continue down a path its own central bank says is no longer viable.
As poverty deepens and unemployment rises, Pakistan’s time for denial is running out.
