Pakistan’s economy is facing a stark reality check as high taxes and soaring energy costs have prompted several multinational corporations to pack up and leave. Finance Minister Muhammad Aurangzeb recently highlighted this troubling trend during a press briefing, underscoring how burdensome fiscal policies and unreliable power supply are choking the nation’s business landscape.
In recent months, giants like Unilever, PepsiCo, and Nestle have either scaled back operations or completely exited the Pakistani market. The minister pointed out that electricity tariffs have skyrocketed by over 50% in the past year alone, coupled with frequent load-shedding that disrupts manufacturing and logistics. Add to that a tax regime that imposes some of the highest corporate rates in South Asia, and it’s no wonder international investors are looking elsewhere.
Aurangzeb didn’t mince words, stating that these exits represent a ‘serious blow’ to foreign direct investment, which has already plummeted by 20% year-on-year. He elaborated on how Pakistan’s energy crisis, rooted in circular debt exceeding PKR 2.5 trillion, has made industrial production unviable. Companies are now relocating to neighboring countries like Bangladesh and Vietnam, where costs are lower and infrastructure more reliable.
The government acknowledges the issue but insists reforms are underway. Plans include tariff rationalization and tax incentives for exporters, yet critics argue these measures are too little, too late. As Pakistan grapples with a ballooning current account deficit, the exodus of global firms signals deeper structural woes that demand urgent attention. Without swift action, the country’s aspirations for economic revival could remain elusive.