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Pakistan’s stock market has experienced severe downside volatility after its classification in MSCI’s emerging market index in 2016. Global pandemic, political instability and capital limitations through money laundering control mechanisms have exposed the foundations of capital allocation to an escalating risk of default. The situation prerequisites a review of contentious relationship between drivers of economic growth and stock market expansion. This paper seeks to examine the relationship between non-financial and banal drivers of economic growth and their relative impact on stock market development in Pakistan, building on the fact that financial market development is a direct outcome of economic growth and development of the generic capabilities of production and capital formation through profit trails. GMM approach is used to analyze the contribution of capital formation and allocation through generic productivity and risk allocation mechanism. The paper discusses GDP growth, Gross fixed capital formation, Private credit and use of IMF credit as instrumental in determining stock market expansion. Originality of the research transpires from the fact that key outputs of real sector have been added to analyze the development of financial market which have long been ignored as extraneous for empirical analysis.