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Rebalancing Pakistan’s Growth Model from Consumption towards Productivity

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  • Chohan, Usman W.

Abstract

This paper examines the structural weaknesses of Pakistan’s consumption-led growth model and argues for a transition toward productivity-driven economic development. For decades, Pakistan’s economy has relied heavily on household consumption, imports, remittances, and debt-financed expansion, resulting in recurring balance-of-payments crises, weak industrial competitiveness, and chronic dependence on external financing. The paper analyzes the causes and limitations of this model while comparing Pakistan’s experience with the productivity-oriented development strategies of East Asian economies. It argues that sustainable growth requires higher investment, export diversification, industrial upgrading, human capital development, technological innovation, and institutional reform to create a more resilient and competitive economic structure.

Suggested Citation

  • Chohan, Usman W., 2026. "Rebalancing Pakistan’s Growth Model from Consumption towards Productivity," SocArXiv hnbfx_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:hnbfx_v1
    DOI: 10.31219/osf.io/hnbfx_v1
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    References listed on IDEAS

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    1. Aziz, Mehnaz & Bloom, David E. & Humair, Salal & Jimenez, Emmanuel & Rosenberg, Larry & Sathar, Zeba, 2014. "Education System Reform in Pakistan: Why, When, and How?," IZA Policy Papers 76, Institute of Labor Economics (IZA).
    2. Ishrat Husain, 2012. "Economic Reforms in Pakistan: One Step Forward, Two Steps Backwards (The Quaid-i-Azam Lecture)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(4), pages 7-22.
    3. Nooreen Mujahid, 2014. "Determinants of Female Labor Force Participation: A Micro Analysis of Pakistan," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 2(5), pages 211-220, May.
    4. Pierre van der Eng, 2025. "Pakistan's Economy: Fallout of 2022 Economic Distress Magnified the Need for Structural Reforms," Asian Economic Policy Review, Japan Center for Economic Research, vol. 20(1), pages 128-146, January.
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