Pakistan’s economy remains trapped in a low-growth equilibrium. The government wants to kickstart expansion, and there is visible activity in the twin cities aimed at accelerating growth. Yet, none of it is yielding meaningful results.

Given the high fiscal stress and precarious balance-of-payments position, policymakers are compelled to maintain tight fiscal and monetary stances—keeping primary fiscal surpluses and positive real interest rates.

The government is now banking on investment, mainly from friendly Middle Eastern nations, to gain both fiscal and external breathing space. After the recent defence pact with Saudi Arabia, Islamabad’s corridors buzzed with optimism over potential inflows of investment and debt. Some even speculated about leveraging ties with the Middle East to exit the IMF programme.

A Saudi business delegation recently toured Islamabad, Lahore, and Karachi for meetings with government officials and private-sector leaders. Excitement briefly surged, with talk of joint ventures across........

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