Charting the Resilient Economic Future for Pakistan Post-IMF: Challenges and Prospects

Despite achieving the macro-economic stability with the assistance of multilateral institutions and bilateral allies, Pakistan’s external debt stands at 34.3% of its GDP. Over the years, the IMF has engaged with Pakistan 24 times, acting as a lender of last resort and a partner in times of adversity, offering policy advice and financial support. The World Bank is currently invested in 55 projects worth USD 14.7 billion, focusing on areas such as hydropower, education, and infrastructure. Additionally, support from countries like China and Saudi Arabia has contributed significantly to strengthening Pakistan’s resilience.

Over the last two decades, Pakistan has faced multifaceted challenges, including a shrinking macroeconomic base despite an annual population growth rate of 2.55%. By 2050, the country’s population is expected to double, and without the creation of sufficient economic opportunities, the intensity and frequency of social and economic crises are likely to escalate. Pakistan’s resilience has been tested by conflicts, border hostilities, instability in neighbouring countries, and ethnic and religious tensions. These factors have disproportionately affected the poor and marginalised. Since 2001, Pakistan has endured the loss of over 67,000 lives and USD 127 billion in economic damages (Ministry of Finance, Pakistan).

Expensive energy imports further impede the country’s industrial potential, and the state faces the dual challenge of meeting the basic needs of its growing population while securing their lives and property. However, Pakistan’s resilience is underscored by the adaptability and innovation of its people, a state committed to mindful governance, and the international community’s consistent support during crises.

The informal sector plays a critical role in this resilience. With 76% of the non-agriculture labour force working informally, Pakistan’s citizens contribute to the economy despite lacking formal employment opportunities and equitable access to resources. The Pakistani diaspora, too, plays a vital role, sending remittances that equal the country’s export revenue, showcasing a modern and tolerant image of Pakistan abroad.

Agriculture and trade have also been central to the country’s resilience. The agricultural sector not only feeds the growing population but also supports industries and exports. Textile exports remain a cornerstone of Pakistan’s trade, while trade liberalisation has facilitated foreign revenue generation, technology transfer, and innovation. Strengthening regional trade could further enhance connectivity, infrastructure use, and regional peace.

The seminar developed a practical and actionable policy framework that ensured the then forthcoming Extended Fund Facility became Pakistan’s last IMF programme. The ultimate goal was to place Pakistan on a trajectory of sustainable and shared prosperity.