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Pakistan's economy is spiralling into a deeper structural crisis, marked by the simultaneous flight of skilled professionals, multinational corporations, and local investors.
What was once dismissed as temporary instability has evolved into a systemic breakdown driven by excessive taxation, erratic policies, and state dominance over private credit and enterprise, as reported by The Express Tribune. According to The Express Tribune, in recent years, Pakistan's private sector, the traditional engine of job creation, has been crippled. High tax rates have pushed experienced professionals to seek opportunities abroad, while major multinationals have sold their stakes or exited entirely. Even domestic manufacturers and entrepreneurs are relocating to countries like the UAE, Sri Lanka, Egypt, Malaysia, and Bangladesh, citing friendlier business climates and stable tax regimes. Government fiscal policy has turned increasingly punitive toward the productive class. The salaried middle class and small businesses are facing tax rates exceeding 40 per cent, while real incomes decline. Companies, already struggling with weak demand, face one of the highest tax burdens in South Asia, combining super tax, minimum turnover levies, and withholding charges. The situation has led to an alarming decline in investment and employment. With over 75 per cent of fresh bank credit directed toward government borrowing, private firms are starved of working capital. Banks now prefer risk-free lending to the state, exacerbating deindustrialisation as manufacturing, textiles, and construction sectors slash operations or halt expansion. Meanwhile, the exodus of global corporations such as P&G and other multinational giants is reshaping the market. Local firms have begun filling the void, especially in FMCG and pharmaceuticals, signalling a forced "localisation wave". Yet this shift highlights the failure of economic management rather than resilience, as highlighted by The Express Tribune. Unless Pakistan reforms its tax structure, revives private credit, and adopts pro-investment policies, the economy risks irreversible decline. Without restoring investor confidence and fostering growth, Pakistan's 250 million-strong market could soon become its most significant liability, as reported by The Express Tribune. (ANI)
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