A bid for consistency in policymaking

Pakistan is finalising its first-ever medium-term industrial policy through consultations with key ministries, regulatory bodies, local and international experts and private sector platforms. The policy aims to reverse the trend of deindustrialisation and raise the manufacturing sector’s share in the GDP from the current 18 per cent to 26pc by 2035. Notably, this target merely restores the level last recorded in 1996, when manufacturing contributed 26pc to the national economy. Alarmed by the negative 1.7pc growth in large-scale manufacturing during FY25, policymakers are grappling with the sector’s persistent decline. In contrast, small and medium-sized enterprises have shown more resilience, maintaining a stable year-on-year growth of around 9pc, except in FY20 when it fell to just 1.3pc, likely due to the pandemic shock. Pakistan’s export performance in the region also remains dismal. On a graph of per capita exports, Pakistan ranks at the bottom, lagging behind Bangladesh, India and Vietnam.