By Manahil Jaffer

Pakistan, amid various economic challenges, has demonstrated resilience and the ability to adapt. The year 2024 marks a turning point, with a series of significant developments across key sectors, highlighting an upward trajectory in economic performance. Through strategic international partnerships, infrastructure investments, and growth in exports and renewable energy, Pakistan is setting the stage for sustainable development.

Gwadar International Airport, virtually inaugurated by Chinese Premier Li Qiang during his visit to Pakistan, symbolizes not just infrastructural progress but also Pakistan's growing geo-economic significance. Funded by China under the China-Pakistan Economic Corridor (CPEC), this airport is designed to handle international and domestic flights, boosting connectivity and economic activity in Balochistan.

The Civil Aviation Authority (CAA) has confirmed that the airport, one of Pakistan's largest, will greatly enhance Gwadar’s potential as a trade hub. As of 2024, Gwadar port operations have already contributed an estimated $2.5 billion to the national economy, according to CPEC authorities. The new airport will likely further increase trade traffic, reduce logistical bottlenecks, and encourage foreign direct investment (FDI). Moreover, it will serve as a critical node in Pakistan's Belt and Road Initiative (BRI) commitments, aimed at improving regional trade networks.

The operationalization of the airport is projected to boost annual trade through Gwadar by 35%, enabling Pakistan to attract international investors and align more closely with Central Asian markets. Experts predict a $1 billion increase in trade within two years of the airport’s opening.
Premier Li Qiang’s visit also coincides with Pakistan and China’s renewed focus on "high-quality development" under CPEC. While the initial phase of CPEC concentrated on critical infrastructure like roads and power plants, the current phase emphasizes economic diversification, particularly in industrial cooperation, green energy, and special economic zones (SEZs).

According to the Ministry of Planning, Development, and Special Initiatives, CPEC Phase 2 has already attracted $25 billion in fresh investments in 2024, with a key focus on upgrading technology in manufacturing and agriculture. Notably, the Rashakai SEZ has signed deals with international firms, promising to create an additional 40,000 jobs in the next five years.

With Pakistan's economic focus shifting towards industrialization and renewable energy under CPEC, GDP growth projections for 2024 have been revised upward to 4.3%. Furthermore, the country is expected to see a 20% reduction in its trade deficit due to increased export capabilities stemming from CPEC projects.

Another bright spot in Pakistan’s economic landscape comes from its traditional industries. The Pakistan Carpet Manufacturers and Exporters Association (PCMEA) reported a substantial boost in exports following a successful international exhibition in Lahore. According to the PCMEA Chairman, Mian Atiqur Rahman, and Vice Chairman, Riaz Ahmad, carpet exports are expected to rise by 15-20% in 2024, a significant recovery after pandemic-driven slowdowns.
Carpets remain a crucial export commodity, particularly to European and Middle Eastern markets. In 2023, Pakistan’s carpet industry contributed $100 million to exports, and with the forecasted increase, this could rise to $120 million by the end of 2024. The surge is attributed to government incentives, improved quality control, and access to new markets.

Amidst Pakistan's chronic energy challenges, the Lahore Electric Supply Company (LESCO) has made notable progress in integrating renewable energy sources into the grid. As of 2024, 15% of LESCO’s power demand is being met through solar energy. This is a major leap considering that only 8% of the region’s demand was met through renewables in 2022.

Government-led initiatives, such as the promotion of net-metering and subsidies for solar panel installations, have fueled this growth. Solar energy in Pakistan is expected to touch 20% of LESCO’s total power demand by the end of 2024. According to the Pakistan Solar Association, solar energy now powers approximately 2 million households in Pakistan, helping reduce reliance on imported fossil fuels.

The transition to solar energy is expected to save Pakistan $1.5 billion annually on energy imports, significantly easing the burden on foreign exchange reserves. Moreover, with solar panel prices declining globally, the widespread adoption of renewable energy is poised to transform Pakistan’s energy landscape, improving energy security and lowering costs for consumers.

Alongside these sectoral improvements, Pakistan’s broader economic indicators have shown signs of stabilization in 2024. The country’s inflation rate, which reached a peak of 27% in 2023, has now moderated to 9.5%, as reported by the Pakistan Bureau of Statistics. This reduction is largely attributed to tight monetary policies, improved agricultural output, and a decrease in global commodity prices.

The Pakistani rupee, which had faced significant depreciation, has started to recover following a successful IMF bailout programs (2023,2024) and growing remittances. According to the State Bank of Pakistan, remittances have increased by 7% in the first quarter of 2024, largely driven by inflows from the Middle East and the United States.

The stabilization of inflation and recovery of the rupee have increased consumer confidence and purchasing power. These developments, coupled with strong inflows of foreign remittances, have led to a more favorable economic environment, encouraging investment and consumption.

As Pakistan looks toward the future, the positive economic indicators emerging in 2024 point to a more resilient economy. While challenges remain, particularly in terms of debt management and global economic uncertainties, the steps being taken today are setting the foundation for a more prosperous future. With continued focus on international partnerships, diversification, and sustainable growth, Pakistan can confidently look forward to greater economic stability and development in the years ahead.