Where is Prime Minister Nawaz Sharif's government heading as 2016 dawns? The state of the economy and how the government has treated voters during its five-year term will be the key deciders for its future.

Sharif's government said it has achieved its election victory target of macroeconomic stability. Finance Minister Ishaq Dar claimed the government is now focusing on increasing growth and job creation during its remaining tenure.

The claim is correct to some extent but there are a large number of "ifs" and "buts" related to the quality of decision making by the government which has hugely borrowed internationally.

The government has nearly succeeded in attaining macroeconomic stability during the last two-and-a-half years. The Sharif-Dar team is trying its best to stage an uptick. All indications are that it will succeed.

The GDP is expected to move around five per cent after staying in the four to 4.5 per cent range for a long time. A lot will depend on how much the energy situation improves and the power and gas shutdowns are kept in check. The energy sector for nearly three years in the past was responsible for reducing the GDP between 1.5 to two per cent annually.

Several small electricity projects have come online in the last few months and more are due to start generation in the months to come. As LNG has started arriving from Qatar gas supply and gas-based electricity generation is up. It will expand more in 2016.

Prices for several consumer items including food will continue to rise in 2016 despite the government's claims of a major decline in inflation and consumer prices.

Pakistani exports have remained stagnant at around $24 billion in the last three years. Commerce Minister Khurum Dastgir attributed it to "continued lower production of exportable goods due to the ongoing energy crisis." "Another reason was reduced demand in Europe and the US for Pakistani exports particularly textiles."

The government hopes to expand exports to around $30 billion if international demand and the price situation do not decline further in 2016.

"Part of the larger exports will be a result of measures incorporated in the new three-year Export Policy - 2015-'18 which is ready to be unveiled" he said.

Finance Secretary Waqar Masood said: "The Consumer Price Index [CPI] was contained at 1.86 per cent during the first months of FY-2016 [July-October calendar year 2015] as compared to 6.45 per cent in the corresponding period last year. Effective monetary policy along with better supply of commodities coupled with decline in international oil and commodity prices helped in containing inflation."

Bank credit is available at six to 6.5 per cent interest rate as a result of easy monetary policy.

"The interest rate is the lowest in the last 11 years" said Ashraf Wuthra governor State Bank of Pakistan (SBP) the central bank.

"It is in line with the business and private sector demand for reducing the cost of production and the cost of doing business. It should help them raise industrial output and exports. At the same time it should also bring down prices for domestic consumers in 2016" Wuthra said.

He added: "Liquidity with commercial banks will improve further in 2016 because the government is likely to reduce its borrowing from commercial banks to bridge its budgetary deficit. This will enlarge private sector credit takeoff from commercial banks in 2016. It will help the private sector to produce more and export more."

Credit to the private sector rose to Rs40 billion in July-November 2015 compared to Rs58 billion in the same period last year. It should go up further in 2016 on the back of record-low interest rates and increasing private sector demand as industrial output is rising.

Looking at the large scale manufacturing sector output is estimated to rise much faster than it has in recent months. The first quarter of FY-16 saw an uptick in output and it rose to 3.9 per cent as compared to 2.6 per cent in the like period of FY-15 on the back of better electricity and gas supply.

Home remittances sent by overseas Pakistanis working in the UAE Saudi Arabia US and UK stood at $8.8 billion in the first five months of FY-16 up nine per cent compared to the like period of FY-15. The inflows' forecast by the Ministry of Finance and the SBP move up next year from $19 billion in FY-15 to $20 billion plus in FY-16.

Foreign direct investment rose 7.7 per cent in Q1 of FY-16. Both private and public foreign investment put together the inflows rose by 18.5 per cent. These inflows can be hit if the international oil-led slowdown deepens in 2016 the Ministry of Finance said.

The foreign exchange reserves in two years have risen nearly 50 per cent to $20 billion. Dar said the amount would rise to $21 billion within days. It includes money received through high-interest rate dollar and sukuk bonds.

What do all these facts lead to? The just-unveiled Business Confidence Index prepared by Overseas Investors Chamber of Commerce and Industry (OICCI) is positive about the Pakistani economy business and investment.

Atif Bajwa president of OICCI commenting on the state of Pakistani business said: "The record low level of inflation and borrowing rate together with media coverage of upcoming projects especially those related to China-Pakistan Economic Corridor as well as a relatively stable political environment have all helped boost business confidence as revealed in the survey."

That gives one a good long look at where the Pakistani economy is headed in 2016 - and beyond.

Views expressed by the author are his own and do not reflect the newspaper's policy.