‘Economic stability requires growth in industrial production, exports and employment’
KARACHI: President of the Pakistan Businessmen and Intellectuals Forum and the All Karachi Industrial Alliance, who is also the Chairman of the National Business Group Pakistan as well as that of the FPCCI Policy Advisory Board, Mian Zahid Hussain, has said lower unnecessary expenditure, improved tax collection and greater private investment could ease fiscal pressure.
Lasting economic stability required sustained growth in industrial production, exports and employment.
He said that rising external public debt and declining exports require greater emphasis on productive sectors in economic policymaking.
Citing the Ministry of Economic Affairs’ annual report for FY2025–26, released on November 11, he said external public debt reached USD 98.075 billion on June 30, 2026, an increase of USD 6.28 billion, or 6.84 percent, in one year. Strengthening Pakistan’s foreign exchange earning capacity was essential to reducing its dependence on borrowing.
Mian Zahid Hussain said Pakistan spent USD14.436 billion on servicing external public debt during the previous fiscal year, comprising USD 11.198 billion in principal repayments and USD 3.238 billion in interest. Meanwhile, the country received USD 16.16 billion in foreign economic assistance.
Alongside external debt, domestic public debt increased by approximately 9 percent to Rs59.441 trillion at the end of June 2026, accounting for 68.5 percent of total public debt.
He said domestic borrowing included funds from local banks, financial institutions and individuals investing in National Savings schemes and government securities.
He said the continued increase in debt despite substantial repayments required careful assessment of the terms, maturities and economic benefits of new financing.
Reducing unnecessary government expenditure and improving tax collection were essential to containing domestic borrowing and its interest burden. Stable export earnings were equally necessary to repay external debt and reduce the recurring need for debt rollovers.
Mian Zahid Hussain said USD 9.375 billion, or approximately 58 percent of foreign assistance received, supported the budget and balance of payments, while project financing amounted to USD 3.435 billion, or approximately 21.3 percent. The remaining inflows included USD 1.329 billion in programme financing and USD 2.019 billion in commodity financing. Meeting immediate budgetary and foreign exchange requirements was important, but the timely completion and economic usefulness of externally financed projects must also be ensured. Effective projects in energy, water, transportation and skills development could reduce industrial production costs and improve productive capacity.
Mian Zahid Hussain said Pakistan’s merchandise exports declined by 5.93 percent to USD 30.139 billion during FY2025–26, while imports increased by 8.14 percent to USD 69.761 billion.
Consequently, the trade deficit widened by approximately 22 percent to USD 39.622 billion.
Export earnings covered only 43.2 percent of the merchandise import bill. He said narrowing this gap required greater domestic value addition and export-oriented production while maintaining imports of essential raw materials and modern machinery needed to expand exports.
Mian Zahid Hussain said overseas Pakistanis sent USD 41.585 billion in remittances during FY2025–26, an increase of 8.6 percent over FY2024–25. These inflows provided vital foreign exchange and supported the expenses of millions of households.
However, remittances were private household income and should not be treated as government revenue or a permanent alternative to developing the capacity to repay public debt. He urged the authorities to make transfers through formal channels easier and less expensive.
Pakistani workers’ technical skills should also be improved and aligned with the requirements of labour-receiving countries to help them secure better employment abroad.
Mian Zahid Hussain urged the government to ensure reliable, affordable energy, low-cost financing and timely tax refunds for export industries.
Quarterly reports should disclose the costs, completion status and outcomes of externally financed projects. Principal repayments, interest payments and rollover requirements should be presented separately and reviewed regularly.
Copyright Business Recorder, 2026