The recent commendation from the International Monetary Fund (IMF) on Pakistan’s economic performance, particularly its “strong” adherence to the Extended Fund Facility (EFF) program, offers a welcome glimmer of hope for a nation long grappling with economic instability. This endorsement, voiced by IMF Resident Representative Mahir Binici, acknowledges the arduous reforms undertaken and the tangible progress achieved in restoring a degree of macroeconomic stability. However, while the praise is well-deserved for the diligent efforts of the government, it is crucial to approach this optimism with a pragmatic understanding of the road still ahead.
Pakistan’s performance under the EFF has indeed been robust. The successful completion of the first review in May 2025, and the general consensus on the federal budget blueprint, are significant milestones. Early policy measures have demonstrably helped in reining in inflation, stabilizing the exchange rate, and initiating the rebuilding of investor confidence. The commitment to fiscal consolidation, evident in achieving a primary surplus, is a critical step towards sustainable debt management. Furthermore, the securing of the Resilience and Sustainability Facility (RSF) underscores a forward-looking approach to climate resilience, an increasingly vital aspect of national development.
This period of stability, though hard-won, has come at a cost. Economic growth, while showing signs of picking up in 2025 and beyond as projected by the IMF, remains anemic. The real challenge now lies in translating macroeconomic stability into inclusive and sustainable growth that genuinely impacts the lives of ordinary citizens. Exports and foreign direct investment, crucial for long-term prosperity, are yet to gain significant momentum. The tax-to-GDP ratio, despite efforts to broaden the tax base, continues to be among the lowest globally, indicating persistent structural weaknesses in revenue mobilization.
Binici’s cautious tone, acknowledging elevated trade tensions, geopolitical fragmentation, and weakening global cooperation, serves as a crucial reminder. Pakistan’s economy remains susceptible to external shocks. The hard-won gains are not irreversible and demand sustained, proactive policy action. The emphasis on strengthening tax equity, improving the business climate, and fostering private-sector-led investment is not merely an IMF prescription; it is the fundamental pathway to breaking free from the boom-and-bust cycles that have historically plagued the nation.
Therefore, while celebrating the IMF’s recognition of Pakistan’s progress, it is imperative that this commendation fuels, rather than diminishes, the resolve for deeper, more impactful reforms. The government must resist the temptation to become complacent. The focus must shift from simply meeting program targets to implementing comprehensive structural changes that foster genuine economic resilience, create employment opportunities, and ultimately uplift the living standards of all Pakistanis. This requires not just fiscal discipline, but a renewed commitment to good governance, institutional strengthening, and a consistent, predictable policy environment that encourages long-term investment and productivity. The current stability is a foundation, not the edifice itself; the real work of building a prosperous and equitable Pakistan continues.
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