A growth rate above four per cent would be welcome. But the greater achievement would be to make that growth broad-based, export-oriented and sustainable so that Pakistan no longer has to begin the journey again after every economic boom. Finance Minister Muhammad Aurangzeb’s confidence that Pakistan’s economy can grow by more than four per cent in the current financial year is encouraging, but the real test lies beyond the headline growth rate. For a country that has repeatedly moved between periods of expansion and economic crisis, the central challenge is not simply achieving higher growth; it is building an economy capable of sustaining it.

Pakistan’s economic history offers enough evidence to remain cautious. Growth has often been followed by pressure on the balance of payments, rising imports, shrinking foreign exchange reserves and renewed dependence on external financing. The recurring boom-and-bust cycle has prevented the country from translating periods of economic expansion into lasting improvements in productivity, employment and living standards.

The Finance Minister’s observation that Pakistan is now moving from stabilization towards growth is therefore significant. The reported fiscal improvements, including a fiscal deficit at a 22-year low, three consecutive years of primary surpluses and a current account surplus last year, provide a stronger foundation than in previous years. These gains should not, however, be treated as an end in themselves. Stabilization is only useful if it creates the conditions for structural reforms and productive investment.

The government’s emphasis on export-led growth is particularly important. Pakistan cannot afford another expansion driven largely by imports and consumption. Such a model may temporarily raise economic activity, but it eventually creates pressure on foreign exchange and widens external vulnerabilities. Sustainable growth must instead be based on higher productivity, stronger exports, investment and greater competitiveness.

This requires more than budgetary incentives or official declarations. Pakistani exporters face long standing problems involving energy costs, taxation, regulatory uncertainty, infrastructure deficiencies, limited access to finance and inconsistent policy. Addressing these barriers should be central to the government’s economic strategy. Exporters need a predictable business environment in which investment decisions can be made with confidence.

Diversifying the country’s export base is equally essential. Pakistan remains heavily dependent on a relatively narrow range of products and markets. Expanding into higher-value manufacturing, technology, engineering, pharmaceuticals, processed agriculture and other knowledge-intensive sectors could provide a more resilient source of foreign exchange. At the same time, small and medium-sized enterprises should receive greater attention because they have significant potential to generate employment and broaden the productive base.

The proposal to provide subsidized financing to SMEs deserves consideration, but such support must be carefully designed. Cheap credit alone cannot make businesses competitive. Financing should be linked to productivity, exports, technology adoption and job creation, while safeguards must ensure that public resources do not become another channel for inefficient lending.

Pakistan now has an opportunity to turn economic stabilization into durable growth. That opportunity will depend on maintaining fiscal discipline while creating room for productive investment. Above all, policymakers must resist the temptation to celebrate short-term indicators and instead focus on structural transformation.