Economic challenges of Pakistan 2022-2023


To understand the economic challenges that Pakistan will face in 2022-2023, it is essential to look at the current state of its economy. Pakistan is facing many economic challenges that must be addressed to achieve sustainable economic growth in 2022-2023. These challenges include high poverty and inequality levels, an unsustainable current account deficit, and a lack of infrastructure development. Addressing these issues will require significant investment and effort from the government and private sectors.

This article talks about some of the most important economic problems Pakistan will face in the next ten years and how they might be solved.

Key economic challenges in Pakistan:

1. High levels of poverty and inequality

2. An unsustainable current account deficit

3. A lack of infrastructure development

4. A large informal economy

5. A population that is predominantly young and poorly educated

6. Political Crises

These challenges present a significant barrier to Pakistan’s sustained economic growth. The government and private sector must invest in several areas to address these issues.

  1. 1. Poverty and inequality:

One of the biggest challenges Pakistan faces is high levels of poverty and inequality. According to the World Bank 2021, approximately 22% of Pakistan’s population lives below the poverty line. Therefore, many people are without the means to meet their most fundamental needs, including food, housing, and medical care. In addition, economic inequality in Pakistan is quite significant. During 2018-2021, the Gini coefficient (a measure of the income distribution) averaged 36.20. This means that Pakistan’s income distribution is highly unequal, with a large portion of the population living in poverty. The new worse conditions started in April 2022 after the change of government and also in august 2022. Floods increase the number of poor.

Addressing these issues will require investments in social welfare and safety net programs and targeted interventions to reduce inequality. The government will also need to create more employment and economic growth opportunities.

2. An unsustainable current account deficit

In the past few years, Pakistan’s current account deficit has been one of the biggest problems for its economy. The current account is the difference between a country’s exports and imports. A deficit occurs when a country imports more than it exports. Pakistan’s current account deficit reached a record high of $14.17 billion in 2018. This was primarily due to higher import costs and a decrease in exports. The current account deficit put pressure on the Pakistani rupee, which lost value against the US dollar. It also led to a decline in foreign currency reserves, which made it difficult for the government to pay for imports.

Facts & Figure

The government has implemented several measures to address this challenge, including reducing imports and increasing exports. The government has also secured loans from international institutions like the International Monetary Fund (IMF).

3. A lack of infrastructure development

Another significant challenge Pakistan faces is a lack of infrastructure development. This includes a lack of roads, railways, and airports. In addition, Pakistan’s energy sector is also in need of investment. The country suffers from frequent power outages, a significant barrier to economic growth. According to the World Economic Forum’s Global Competitiveness Report, Pakistan ranks 118th out of 145 countries in terms of infrastructure. After the floods in august 2022, more than 40% of Pakistan’s infrastructure is destroyed.

Lack of Infrastructure (Source: pakistanreader)

To address this challenge, the government must make significant infrastructure development investments. This will require both domestic and foreign investment. In addition, the government will need to create an environment conducive to investment, such as by improving the business climate.

4. A large informal economy

A large portion of Pakistan’s economy is informal. This means that it is not subject to government regulation or taxation. The informal economy includes activities like agriculture, construction, and domestic work. According to some estimates, the informal economy comprises up to 60% of Pakistan’s GDP.


The informal economy challenges the government because it is difficult to collect taxes from this sector. In addition, the informal economy is often associated with poor working conditions and low wages. As a result, workers in the informal economy are often unable to escape poverty. To address this challenge, the government will need to formalize the informal economy and create more opportunities for formal employment.

5. A population that is predominantly young and poorly educated

Corruption is another major challenge Pakistan faces. Corruption manifests in several ways, including bribery, nepotism, and embezzlement. According to Transparency International’s Corruption Perception Index, Pakistan ranks 116th out of 180 countries regarding perceived corruption. This means that corruption is a significant problem in Pakistan.

Pakistan Population

Corruption is a significant challenge because it leads to inefficiency and waste. In addition, corruption erodes trust in institutions and deters investment. To address this challenge, the government must take action to stamp out corruption at all levels. This will require both preventive measures and punitive measures.

6. Political system

Political and economic difficulties persist 75 years later. Leaders with no common sense or judgment continue to criticize others in public. Due to political unrest, a drop in exports, and a decrease in foreign currency reserves, the rupee has hit a record low.

The IMF plan’s strict requirements and limits have sent shockwaves through the whole economy, and political instability has made the situation dangerous if economic policy stays ineffective. Resentment, hatred, ego, and stubbornness shook the nation. Economic and political issues persist due to partisan and self-interested leaders. Independent elections and political changes might enhance the future. Pakistan’s leaders, such as Imran Khan of the PTI, Nawaz Shareef of the PML-N, Asif Zardari of the PPP, Alama Fazal ur Rehman of the JUI, Muhammad Qadri of the MQM, Siraj ul Haq of the JI, Professor Doctor Muhammad Tahir Qadri of the PAT, and Professor Doctor Muhammad Tahir Qadri of the PAT, need to do their jobs.


Pakistan is currently facing several economic challenges. These include a sizeable current account deficit, a lack of infrastructure development, and a large informal economy. In addition, corruption is also a significant problem in Pakistan. To address these challenges, the government must improve the business climate, increase investment in infrastructure, and formalize the informal economy. In addition, the government will also need to take measures to stamp out corruption at all levels.          


1. What are the biggest challenges facing Pakistan’s economy?

2. How is the current account deficit affecting Pakistan’s economy?

3. What is the government doing to address the infrastructure development challenge?

4. What are the informal economy’s implications for Pakistan?

5. Why is corruption a major challenge for Pakistan’s economy?