Sharif's third term moved from social conservatism to social centrism. In 2016, he called the future of Pakistan as one underpinned as an "educated, progressive, forward looking and an enterprising nation". In January 2016 he backed the Punjab government policy of banning Tablighi Jamaat from preaching in educational institutions and in February he enacted a law to provide a helpline for women to report domestic abuse, despite the criticism of conservative religious parties.
Sharif's government hanged Mumtaz Qadri on 29 February 2016. Qadri had fatally shot Salman Taseer over his opposition to blasphemy laws. According to BBC News, the move to hang Qadri was an indication of the government's growing confidence in taming the street power of religious groups. To the disliking of religious conservatives, Sharif promised that the perpetrators of honour killings would be 'punished very severely'. In March 2016, The Washington Post reported that Sharif was defying Pakistan's powerful clergy by unblocking access to YouTube, pushing to end child marriage, enacting a landmark domestic violence bill, and overseeing the execution of Qadri. Sunni Tehreek led protests of nearly 2,000 Islamic fundamentist on 28 March 2016, staging a three-day sit-in at the D-Chowk in Islamabad, demanding that Sharif implement Shariah and declare Qadri a martyr. In response, Sharif addressed the nation, stating that those "fanning the fire of hatred" would be dealt with under the law.
Sharif's government declared that the Hindu festivals Diwali and Holi, and the Christian festival of Easter, were officially public holidays. Time Magazine called this a "significant step for the country's beleaguered religious minorities." On 6 December 2016, Sharif approved the renaming of Quaid-i-Azam University's (QAU) physics centre to the Professor Abdus Salam Center for Physics. Sharif also established the Professor Abdus Salam Fellowship to fully fund five Pakistani doctoral students in physics. In response, the Council of Islamic Ideology criticised Sharif's move claiming that "changing the department's name would not set the right precedent."
During a trip to Pakistan on 10 February 2016, World Bank Group's president Jim Yong Kim applauded the economic policies of Sharif's government. He claimed that Pakistan's economic outlook had become more stable. On 19 March, Sharif approved tax incentives in an attempt to attract new automotive manufacturing plants to the country. In November 2016, the government announced that Renault was expected to start assembling cars in Pakistan by 2018.
On 8 April 2016, following lobbying by international development groups, the government changed its methodology for measuring poverty. The poverty line was moved from ₨2,350 to ₨3,030 per adult per month, which increased the poverty ratio from 9.3% to 29.5%. A PILDAT survey claimed that the quality of governance had improved, though it was still weak for transparency. Fred Hochberg, head of the Export–Import Bank of the United States visited Pakistan on 14 April and said that he "sees a lot of opportunities to expand its exposure to Pakistan."
On 15 December 2016, Pakistan became a signatory of the Organisation for Economic Co-operation and Development's (OECD) Convention on Mutual Administrative Assistance in Tax Matters, aimed at curbing tax evasion. In his 2016 book, The Rise and Fall of Nations, Ruchir Sharma stated that Pakistan's economy was at a 'take-off' stage and the future outlook to 2020 was 'very good'.
On 24 October 2016, months after the Sharif government concluded a US$6.4 billion three-year programme, IMF managing director Christine Lagarde visited Pakistan, during which she maintained Pakistan was "out of economic crisis". She added that continued efforts were needed to bring more people under taxation and to ensure that all paid their fair share. The 2017 Ease of doing business index recognised Pakistan as one of the ten countries making the biggest improvements to business regulations.
The government announced plans to restructure PIA, which sought to become more competitive by leasing newer and more-efficient aircraft. PIA was split into two companies: a holding group would retain some ₨250 billion in debt and excess personnel, and a "new" PIA would hold the lucrative landing rights and new aircraft. The government planned to sell a 26% stake in the new PIA to a strategic partner. In February 2016, Pakistan International Airlines Corporation (PIAC) is to be converted into a public limited company as Pakistan International Airlines Company Limited (PIACL) to make way for privatisation, however this trigged an eight-day union strike. On 23 December 2016, a Chinese consortium won the bid for a 40% stake in the PSX with an offer of US$85.5 million.
Based on the National Action Plan, the government made 32,347 arrests in 28,826 operations conducted across the country from 24 December 2014 to 25 March 2015. During the same period, Pakistan deported 18,855 Afghan refugees while the Federal Investigation Agency (FIA) registered 64 cases for money transfer through Hawala, arrested 83 people and recovered ₨101.7 million. In total, 351 actionable calls were received on the anti-terror helpline and National Database and Registration Authority verified 59.47 million SIMs. On 28 March 2016, a suicide attack by the Jamaat-ul-Ahrar at a park in Lahore killed 70 people on the evening of Easter Sunday. Analysts believed that Sharif's desire to maintain stability in Punjab led him to turn a blind eye towards groups operating there. Following the attack, Pakistan detained more than 5,000 suspects and made 216 arrests.
On 27 October 2016, Sharif hosted the 15th ministerial meeting of Central Asia Regional Economic Cooperation Program (CAREC), and proposed an Open Skies Agreement between the countries.
Balochistan's Home Minister Sarfraz Bugti announced on 25 March 2016 that they had arrested an Indian naval intelligence officer working for Research and Analysis Wing (RAW). Kulbushan Yadav was allegedly involved in financially supporting terrorists and also confessed to his involvement in unrest in Karachi. The same day, India's Ministry of External Affairs stated that Yadav had had no involvement with the government since his early retirement from the Indian Navy. India also demanded consular access for him. On 29 March 2016, Sharif's government released a six-minute video of Yadav apparently confessing to RAW's involvement in the country. On 1 April, Pakistan confirmed that security agencies had arrested several suspects believed to be working for RAW.
Relations between India and Pakistan escalated with the killing of Burhan Wani by Indian security forces on 8 July 2016. Anti-Indian protests started in all 10 districts of the Kashmir Valley. Protesters defied curfew with attacks on security forces and public properties. The unrest led to a standstill in bilateral relations. Indian Home Minister Rajnath Singh accused Pakistan of backing unrest in Kashmir. Tensions reached a boiling point when militants attacked an army base in the Indian-controlled side of Kashmir and killed 18 soldiers. Indian army military operations head Lieutenant-General Ranbir Singh claimed that there was evidence the attackers were members of an Islamist militant group in Pakistan.
Addressing the UN General Assembly on 22 September 2016, Sharif demanded an independent inquiry and a UN fact-finding mission to investigate extrajudicial killing and human rights abuses in Jammu and Kashmir.
On Pakistan's request the United States temporarily stopped drone strikes in north-western Pakistan. In March 2016, as one of his foreign policy successes, the United States Senate blocked a bid to derail the sale of F-16 Falcons to Pakistan by Senate Foreign Relations Committee Chairman Bob Corker, who continued to vow to block the use of US funds to finance the deal.
US Senator John McCain travelled to Pakistan on 26 July 2016 to discuss counterterrorism efforts in the region. In the Financial Times, McCain called upon US and Pakistani leaders not to "allow ambivalence and suspicion to fester", adding that "common interests in counterterrorism, nuclear security and regional stability are too important and too urgent". He also called upon the Obama administration to "make clear its enduring commitment to Pakistan's stability and economic growth." McCain also visited Miramshah in North Waziristan.
Sharif called president elect Donald Trump on 1 December 2016 to congratulate him. The statement released by Sharif's office quoted Trump calling Sharif a "terrific guy", adding that Pakistan is a "fantastic country, fantastic place". Trump Tower put out a statement saying that they "had a productive conversation about how the United States and Pakistan will have a strong working relationship in the future." On 3 December, Dawn reported that a US National Defence Authorisation Act was set to be approved by the US Congress which would recognise Pakistan as a key strategic partner and pledge more than US$900 million in economic and other assistance to the country; half of that would be dependent on Pakistan's commitment to fighting all terrorist groups, including the Haqqani network.
Sharif underwent heart surgery in May 2016 in London. It was his second open-heart operation. His deteriorating health forced him to undergo an open heart surgery only three days before the presentation of the country's annual budget. Many opposition leaders and the legal fraternity, including former Chief Justice Iftikhar Muhammad Chaudhry, raised questions about a possible constitutional crisis in Pakistan. Chaudhry called for electing a new interim prime minister to avoid the crisis.
Tim Craig, writing in March 2016 for The Washington Post, described Sharif's move away from social conservatism as "traced to Sharif's ambitious economic agenda, the influence his 42-year-old daughter has over him, and his awareness that Pakistan remains the butt of jokes". Afrasiab Khattak summarized the shift by stating "[Sharif] knows extremism is not good for business". Sharif's advisor Miftah Ismail described him as "a very religious guy", adding however "he is perfectly okay with other people not being religious". Writing for The Express Tribune in 2016, Fahd Hussain stated that Sharif will likely will face "blowback from its natural allies among the clergy", adding that with "the bulk of the Punjab conservative voter[s] [remaining] in the Sharif camp", that Sharif is eyeing the "liberal, progressive, left-of-centre voters".
On 7 April 2016, The Express Tribune claimed that Sharif's multibillion-rupee health insurance plan seemed to be failing because of poor planning, claiming that the basic health infrastructure doesn't allow for such a plan.
Imran Khan began mobilising workers on 29 October 2016 to lockdown Islamabad, demanding Sharif's resignation and a corruption inquiry. In response, the Sharif government placed a citywide ban on gatherings and arrested hundreds of opposition activists. The government also arrested scores of Pakistan Tehreek-e-Insaf workers and closed the motorway leading from Khyber Pakhtunkhwa. On 1 November, Khan ceased protests after the Supreme Court said it would form a judicial commission to probe allegations stemming from the "Panama Papers" leaks about the Sharif family's offshore wealth. In the first week of January, four Pakistani activists known on social media for their secular leftist views went missing.
According to the Panama Papers, documents leaked in 2016 from law firm Mossack Fonseca, Sharif's family holds millions of dollars worth of property and companies in the UK and around the world. Although they do not name Nawaz Sharif or his younger brother Shebaz Sharif, they link in-laws of Shebaz Sharif and children of Nawaz Sharif to numerous offshore companies.
On 15 April 2016, the government announced an investigation by an inquiry commission of all Pakistanis named in the documents. Opposition politicians said a judge, not a retired judge, should investigate. Various judges have already recused themselves. In addition, on 19 April Army Chief General Raheel Sharif warned that across-the-board accountability was needed.