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Breaking free from boom-bust cycles | The Express Tribune
ISLAMABAD:
There is a general perception that Pakistan’s economy is perpetually trapped in a “boom-and-bust” cycle and will likely remain so. This self-limiting belief has convinced successive governments and the public that any attempt at rapid economic growth is inevitably followed by crisis or stagnation.
It’s a mindset not unlike the myth of Sisyphus, the Greek king condemned by gods to eternally push a boulder uphill, only for it to roll back down just before reaching the summit. Similarly, economic pessimists dismiss every early sign of recovery as part of a futile, exhausting cycle, one that’s destined to end in failure.
The prevailing view is that when a new government comes to power, its first task is to secure an IMF bailout, which provides short-term stability and external financing. This fuels a consumption-led boom, pushing GDP growth to 5% or 6%.
Encouraged by early success, the government increases spending on subsidies and projects. But because this growth lacks export depth or productivity gains, the current account deficit widens, reserves deplete, and the country once again returns to the IMF, restarting the cycle. This raises two questions: does the data confirm that Pakistan has always been trapped in boom-bust cycles, and has it ever outperformed its peers over a sustained period? Both can be answered by comparing Pakistan’s record with India, often seen as a post-1990s growth model.
According to Statisticstimes.com, between 1960 and 2008, Pakistan’s per capita income was higher than India’s for 35 years, while India surpassed Pakistan for only 14 years. Despite volatility, Pakistan performed better overall for most of that period.
But 2008 marked a turning point. Pakistan’s exports began to stagnate, and its GDP growth rate also starting declining, averaging about 3% since then. In contrast, India, Bangladesh, and other regional peers averaged over 6% GDP growth. As a result, Pakistan’s per capita income, which was higher at $1,088 in 2008 compared to India’s $994, fell behind and by 2024 had trailed to $1,643 against India’s $2,300.
So, what changed in 2008? In addition to the global financial crisis, two external shocks hit developing countries: crude oil prices rose by 180% and food commodity prices by 60%. In Pakistan, a newly elected government responded by imposing steep regulatory duties on imports, reversing the trade liberalisation that had been gradually achieved since the 1990s. While oil and food prices normalised by 2009, those duties remained.
Since 2014, additional customs duties have further isolated Pakistan from the booming global trade flows. These new tariff barriers resulted in Pakistan being ranked as having “the second highest effective protection for domestic producers of final consumption goods in the world.” After nearly 17 years of setbacks from protectionist policies, the government has finally recognised that global isolation is unsustainable for a small economy. To lift people out of poverty, as China, Vietnam, and other countries have done, Pakistan must boost productivity and expand exports at a pace comparable to successful developing nations.
The recent budget marks an important step towards trade liberalisation. Though reforms will be phased in over the next five years, they offer hope of putting the country back on a sustainable growth path and reducing dependence on the IMF bailout packages. With the reconfiguration of global supply chains and the opening of the economy, Pakistan could begin to attract foreign investment at levels far beyond the current trickle.
This transition will not be easy. For almost two decades, large industries have been shielded from competition by high tariff walls. Many firms have failed to upgrade their plants or adopt modern technology, leading to higher energy consumption and lower productivity. Consequently, although Pakistan produces several engineering goods, such as household appliances, vehicles, and mobile phones, it cannot compete internationally. Instead, producers prefer to sell domestically, where tariff protection has so far guaranteed higher profits.
Furthermore, a deep-rooted fear of the boom-bust cycle will continue to constrain the economy unless excessive caution is replaced with a more balanced approach that allows for measured risk-taking. Monetary policy illustrates this mindset clearly: Pakistan now has the widest real interest rate gap among its peers, 11% compared to 5.5% in India, despite similar inflation of around 5%. This large disparity continues to stifle investment, slow the growth of large-scale manufacturing, and keep unemployment high.
It is time to acknowledge the economic missteps of the past 17 years and work to regain the lost market share while catching up in GDP growth with peer economies. Pakistan must break free from the self-limiting fear of boom-and-bust cycles and instead pursue bold, forward-looking economic policies.
The decision to re-engage with the global economy and privatise loss-making enterprises is a vital first step, but lasting success will depend on dismantling the regulatory barriers and attracting stronger investment to unlock growth and reduce dependence on external bailouts.
The writer is a member of the PM’s Committee on Tariff Reforms and previously served as Pakistan’s Ambassador to the WTO and FAO’s representative to the UN
Greggs is to shed light on demand from customers as the high street bakery chain contends with the rise of weight loss treatments and cost of living pressures on shoppers.
The high street chain is also wrestling with other factors including increases to labour costs and tax changes.
As a result, on Tuesday March 3, Greggs is expected to reveal pre-tax profits of around £173 million for the year to December 27, representing a 9% drop.
In its previous update shortly after Christmas, Greggs pointed to a strong finish to 2025 as sales growth accelerated in the final quarter of the year.
Like-for-like sales growth rose from 1.5% in the third quarter to 2.9% in the final months of 2025.
Totals sales were up 7.4% in the final quarter amid a boost from the group’s continued store opening programme.
The company opened 121 stores last year.
However, analysts at Deutsche Bank said expectations “have already been set low” for 2026 and are “unlikely to change”.
In January, Greggs said it was “cautious but hopeful” about its outlook for 2026, highlighting “subdued” consumer confidence.
Roisin Currie, chief executive of Greggs, also warned alongside its previous update that there was “no doubt” appetite-suppressing medication is having an impact on the bakery chain’s business.
It may provide more detail on how this continues to change customer eating habits.
Meanwhile, the group also announced that inflation was likely to be shallower than last year.
The group increased the price on a number of products and deals last year, so shareholders will also be keen to see how these changes have continued to impact trading.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Investors are keen to hear how 2026 is shaping up in the early months.
“While the picture on the cost front is beginning to look more favourable, Greggs has plenty of other challenges still to wrestle with.
“Unhelpful changes to tax rules and minimum wages, slowing UK economic growth, and cost-conscious consumers are all weighing on the outlook.”
Yorkshire Cat Rescue in Haworth says it paid £282,000 in vet bills in 2025 and rescued 925 animals.
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Ashish Chauhan confirms National Stock Exchange will list its IPO on Bombay Stock Exchange, as Indian regulations bar self-listing.
The NSE operates the world’s busiest derivatives market by number of contracts traded.
The National Stock Exchange will look at other prominent exchanges like Bombay Stock Exchange (BSE) to list its upcoming IPO when it goes public. Managing Director and Chief Executive Officer Ashish Chauhan told ANI that Indian regulations prohibit the exchange from self-listing.
The NSE operates the world’s busiest derivatives market by number of contracts traded.
Regulatory Framework Bars Self-Listing
Chauhan said Indian regulations prohibit a stock exchange from regulating and listing itself, requiring it to seek admission on another recognised platform. “It’s a regulation of India, and we have to abide by that,” he told ANI.
The comments follow the Securities and Exchange Board of India’s (SEBI) no-objection certificate, which clears a key hurdle for the exchange’s long-pending initial public offering (IPO). Chauhan confirmed that the NSE would pursue listing on an alternative exchange such as the Bombay Stock Exchange (BSE).
Under India’s regulatory framework, exchanges cannot list on their own trading platforms due to conflict-of-interest concerns. Chauhan noted that while some global exchanges, such as Intercontinental Exchange (ICE), the parent of the New York Stock Exchange (NYSE), are listed on their own platforms, India’s rules do not permit such arrangements.
Offer For Sale Structure And Timeline
Chauhan said the IPO would be structured entirely as an Offer for Sale (OFS), with no fresh capital raised. “We are not going to raise money for ourselves,” he told ANI, adding that existing shareholders would be invited to indicate their interest in selling shares.
The exchange, which has nearly 195,000 shareholders collectively owning 100 percent of the company, will take a few months to prepare and file its Draft Red Herring Prospectus (DRHP). SEBI will then review the document before granting further clearance.
On valuation estimates of around USD 50 billion circulating in the market, Chauhan advised caution. Pricing, he said, would be determined closer to launch, based on financial performance, industry comparables, growth trends, and broader economic and geopolitical conditions. Merchant bankers appointed to the issue will advise the IPO committee on the offer price.
Transparency, Governance, And SME Inclusion
Chauhan described the IPO as procedural, aimed at providing liquidity to shareholders rather than funding expansion, noting that the exchange remains profitable.
He said public listing enhances transparency and governance through wider ownership and real-time disclosure requirements. Citing the example of Life Insurance Corporation (LIC), he said governance standards improved following its listing.
In the same interview, Chauhan said India has positioned itself as a cost-effective and inclusive capital market, particularly for small and medium enterprises (SMEs). He contrasted domestic listing costs with those in developed markets such as the United States, where expenses can range between USD 20 million and USD 30 million.
“In India, people are raising USD 1–2 million also. So how much they are spending is probably 5 to 10 per cent of that money to list,” he told ANI, adding that India’s ecosystem of merchant bankers, legal advisers and compliance professionals supports SME participation.
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March 01, 2026, 09:10 IST
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