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Pakistan's Investment Ratio Hits Asia's Lowest at 13.8%, Trails Peers

A new report states Pakistan's investment-to-GDP ratio of 13.8% is the lowest among major Asian economies, lagging far behind regional peers like India and Vietnam. The ratio has declined from a peak of 15.6% in FY22, constrained by structural barriers and bureaucratic red tape. Executives report that establishing an industrial project requires about 25 regulatory permissions, creating uncertainty and prolonging timelines. Economists warn that sub-15% investment levels cap Pakistan's growth potential and sustain large trade deficits.

Key Points: Pakistan's Investment-GDP Ratio Lowest in Asia: Report

  • 13.8% investment-to-GDP ratio is Asia's lowest
  • India sustains over 30% investment ratio
  • 25 regulatory permissions delay projects
  • Exports show volatile recovery
  • Structural barriers constrain growth
2 min read

Pakistan's investment-GDP ratio at 13.8 pc remains lowest in Asia: Report

Pakistan's investment-to-GDP ratio is 13.8%, the lowest among major Asian economies, far behind India and Bangladesh, a new report reveals.

"Pakistan's investment ratio is structurally disconnected from the region. - Maryam Ayub"

New Delhi, Feb 21

Pakistan's 13.8 per cent investment‑to‑GDP ratio ranks far below Bangladesh's 22.4 per cent in 2025 despite latter having a turbulent economy, underscoring Pakistan's position as the lowest‑investing major economy in Asia, a new report has said.

Regional peers such as India and Vietnam continue to sustain investment levels above 30 per cent contrasted with Pakistan, which in it FY22 peak only achieved 15.6 per cent, the report from The Express Tribune said.

Despite macroeconomic stability under the current hybrid and multiparty setup, investor sentiment and outcomes remain weak as structural barriers remain unaddressed, the report said. Executives told the publication that establishing an industrial project still requires about 25 regulatory permissions, prolonging timelines and raising uncertainty, the report said.

"Senior corporate executives privately acknowledge frustration with the performance of the investment facilitation council, which was designed as a single-window platform to cut red tape. While its leadership is widely viewed as disciplined and execution-oriented, business representatives argue that the same rigidity has constrained innovation in investment strategy", the report said.

It highlighted Pakistan's investment ratio declined from 15.6 per cent in FY22 to 13.1 per cent in FY24 before recovering to 13.8 per cent in FY2025, while India sustained 32-35 per cent and Vietnam 30-33 per cent. The report cited economists saying sub‑15 per cent levels cap Pakistan's growth potential far below peers.

Exports fell from $2.85 billion in October to $2.32 billion in December before rebounding to $3.06 billion in January 2026, while imports remained structurally high around $5-6 billion, sustaining large trade deficits.

"Pakistan's investment ratio is structurally disconnected from the region," said Maryam Ayub, Research Economist at the Policy Research Institute of Market Economy (PRIME). "Even economies facing shocks maintain much higher investment than Pakistan, which indicates deep domestic constraints rather than temporary weakness," Ayub was quoted as saying.

- IANS

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Reader Comments

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Priya S
The comparison with Bangladesh is very telling. They've had political instability but still manage a much higher investment ratio. It proves that if the fundamentals for business are right, investors will come. Hope this report leads to some introspection across the border. 🤔
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Aman W
As an Indian, I feel we should not view this with schadenfreude. A stable and prosperous neighborhood is better for everyone's security and trade. Their structural issues with investment and high trade deficits ultimately create instability that can spill over. This is an economic reality, not a point for chest-thumping.
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Sarah B
The data speaks for itself. When your investment-to-GDP is half that of your regional peers, long-term growth is impossible. The report mentions a "single-window" council that became too rigid. It's a classic case of a good idea being implemented poorly without feedback loops. Execution matters more than announcements.
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Vikram M
"Structurally disconnected from the region" – that's a powerful phrase from the economist. It's not about one bad year; it's a deep-rooted problem. Their imports are double their exports! No economy can survive long-term with that kind of deficit. They need to focus on making things, not just buying them.
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Kavya N
Respectfully, while the analysis is sharp, the article focuses only on macro numbers. It doesn't delve into the human cost—the youth unemployment, the brain drain, the impact on ordinary families. Economic reports should connect these dots. The low investment ratio translates to fewer jobs and opportunities for millions. That's the real tragedy.

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