Pakistan’s present geoeconomic and geopolitical position appears well placed to benefit from the emerging “non-hegemonic multilateral” world order — this was the core message echoed at the recently concluded Shanghai Cooperation Organisation (SCO) summit.

However, whether the country can consolidate this position in the years ahead will largely depend on two factors: the ability of the political class and the establishment to evolve a new, constitutionally correct and stable decision-making arrangement and how effectively Pakistan addresses its deep-rooted structural economic shortcomings on a sustainable basis.

Currently, Pakistan’s economy presents a complex paradox — displaying tangible signs of recovery while grappling with entrenched structural weaknesses that threaten long-term stability. In FY25, real GDP growth stood around 2.7 per cent, surpassing the 2.4pc of FY24 but falling short of the targeted 3.6pc — reflecting modest yet notable improvement.

Recent indicators suggest the economy is showing resilience, with sustained growth and inflation sharply falling. Inflation averaged 4.6pc in FY25, down dramatically from the double-digit highs of 2023 — and far below the peak of 38pc recorded in May that year.

Stabilisation was supported by a steep policy rate cut — from 22 per cent in June 2023 to 11pc in May 2025 — along with exchange rate stability........

© Dawn Business