IMF Report on Pakistan Economy Shows Stable Progress

The IMF report on Pakistan economy shows that Pakistan has reduced the risk of a quick economic collapse. The report says the country is now moving on a narrow and fragile path of stability. It also warns that Pakistan still faces slow growth, heavy debt, and very limited relief for people.

The IMF says Pakistan’s economic growth may rise from 2.6% in 2024 to 3.2% in 2026. This increase is very small for a population of more than 245 million people. The income per person is only 1,677 dollars, which shows that the economy is not improving fast.

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Pakistan’s population is growing quickly. Official numbers show a growth rate of 2.55% by mid-2025. The World Bank estimates it between 1.8% and 1.9%. Even with lower growth than before, it still creates a challenge for the economy.

Inflation shows the biggest improvement. It stayed at 23.4% in 2024. The IMF expects it to drop sharply to 4.5% in 2025 and then rise again to 6.3% in 2026. By the end of the period, inflation may fall to 3.2% in 2025 and then climb again to 8.9% in 2026. This change shows that price stability remains fragile.

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Unemployment may fall slightly from 8.3% in 2024 to 7.5% in 2026. This number shows the current growth rate is not strong enough to create many jobs.

Pakistan’s financial reforms are major. Government income and grants may increase from 12.7% of GDP in 2024 to 16.3% in 2026. Spending may stay close to 20% of GDP. Because of this, the budget deficit may fall from –6.8% to –4.0%. Pakistan may also maintain a primary surplus of 2.5%, which the IMF requires.

Even with these steps, the debt burden remains high. Total government debt, including IMF loans, may stay between 72% and 73% of GDP. Guaranteed and public debt may stay near 76%. Domestic debt is about half of GDP, and high interest rates make repayments very costly.

External pressure has reduced but risks remain. Pakistan’s current account may move from a –0.6% deficit in 2024 to a 0.5% surplus in 2025, and then again a small deficit in 2026. Foreign exchange reserves may rise from 9.4 billion dollars in 2024 to 17.8 billion dollars in 2026. Import cover may increase from 1.6 months to 2.7 months. This is better but still low.

Foreign investment remains weak. FDI may stay between 0.5% and 0.6% of GDP. This shows that investors remain careful.

Financial conditions are still tight. Broad money growth may stay between 14% and 16%. Private sector credit may rise from 6% to 15%, but high interest rates continue to limit borrowing. The 6-month treasury bill rate at 21.5% in 2024 shows the high cost of domestic borrowing.

The IMF also notes a 15.4% rise in Pakistan’s real effective exchange rate in 2024. This shows stability in the currency but also creates risk for exports, especially textiles worth 17.3 billion dollars.

Overall, the IMF report on Pakistan economy shows a country that has gained temporary stability through tough measures. But Pakistan still struggles with high debt, weak investment, and slow job growth. The immediate crisis has passed, but turning this stability into strong and lasting economic growth remains a big challenge.

At the end, the IMF report on Pakistan economy makes it clear that Pakistan must strengthen reforms to move toward long-term development.