New Delhi, March 1 (NationPress) A new report warns that by 2031, Pakistan may have to grapple with profound structural issues including limited tax revenue, energy inefficiencies, and government elite capture, or risk a fragile economy with weakened social cohesion.

The analysis from Business Recorder indicates that insufficient reforms could result in average annual GDP growth stagnating at around 2–3 percent for the next five years, only slightly outpacing population growth.

"Stagnation can be perilous in a nation with a young demographic," the report cautions, suggesting that the next five years will be crucial to determine if the youthful population becomes a valuable asset or a source of instability.

"Continued job fragility may lead to increased emigration. While remittances could provide temporary economic relief, the loss of skilled individuals will gradually deplete domestic capabilities," the report states.

Forecasts for Pakistan between 2026 and 2031 predict that the country's fate will be shaped by debt management, inflation trends, and poverty levels. The warning signals slow growth and inflation that could significantly impact household finances.

Experts believe that while stabilization programs and support from the IMF can offer temporary relief, they cannot ensure sustainable growth. Without decisive government action, employment opportunities will likely remain limited to informal, low-productivity sectors.

However, the report suggests that growth could rebound to 4–5 percent by 2029–30, given effective tax reforms, improved revenue collection through digitization, and export-focused policies, potentially alleviating poverty to some degree.

The analysis criticizes the persistent lack of political resolve to broaden the tax base and reduce elite control, stating, "Every external shock—whether from rising oil prices, climate emergencies, or geopolitical conflicts—will push the system back toward reliance on emergency funds," it warns.

Additionally, another report highlights that Pakistan allocates only about 1.9 percent of its GDP to education, significantly lower than the recommended 4 to 6 percent globally, leaving approximately 26.2 million children outside of the educational system. The current curricula provide minimal exposure to digital skills, critical thinking, and practical learning, resulting in a workforce unprepared for technological advancements.

Surveys indicate that 64 percent of graduates struggle to find employment due to skill mismatches, with youth unemployment among graduates estimated at around 31 percent.