Pakistan's investment-to-GDP ratio for the 2024-25 fiscal year failed to reach the targeted 14.2 percent, with private sector investment showing limited growth. However, the ratio improved to 13.8 percent, up from 13.1 percent in the previous fiscal year.

According to figures approved by the National Accounts Committee, several major investment programs have struggled to deliver expected results. The Pakistan Sovereign Wealth Fund (PSWF) remains inactive due to ongoing legal complexities with the International Monetary Fund (IMF), while other initiatives have shifted their focus toward economic policy adjustments.

Fixed investment reached 12 percent of GDP, falling short of the 12.5 percent goal. Private investment stood at 9.1 percent against the projected 9.7 percent, while public sector investment reached 2.9 percent.

Meanwhile, the savings-to-GDP ratio climbed to 14.1 percent, surpassing the 13.3 percent target, largely driven by an anticipated current account surplus.

The IMF's latest staff report estimates foreign direct investment (FDI) at 0.5 percent of GDP, approximately $2.1 billion, slightly below the previous year. The report underscores the need for eliminating barriers caused by restrictive trade policies and inefficient tariffs to boost investment.

To address challenges, the government has pledged to amend the PSWF Act by March 2026. Planned reforms include classifying the fund as a state-owned enterprise, refining governance to meet global standards, and restricting its role to co-investing in commercially viable projects rather than acting as a sole investor or absorbing first-loss risks.

The revised law will introduce stricter transparency measures and competitive procedures for privatization and procurement, ensuring minimum disclosure requirements throughout the process, including beneficial ownership details.