Pakistan’s economy expected to recover as reforms address key issues: IMF

ISLAMABAD: Pakistan has introduced a reform package which will help the country achieve fiscal sustainability and address long-standing economic issues, according to Jihad Azour, Director of the IMF’s Middle East and Central Asia Department.

He revealed some of the main goals of the reforms which includes improving macroeconomic stability, reducing financial risks, and reforming important sectors including energy and state-owned enterprises (SOEs).

Azour said that Pakistan’s economy is now showing signs of recovery, with growth projected at 2.4 per cent this year. This sounds like a big improvement from last year’s contraction of 0.2 per cent.

Interestingly, the economy is expected to improve further, with growth reaching 3.2 per cent in 2025. Inflation has also witnessed a notable drop, falling from 29 per cent last year to 12.6 per cent this year.

There are reports that the inflation in the country will further decline to 10.6 per cent. Finally some good news.

One of the main goals of this reform package is to boost government revenues through better tax collection to reduce the fiscal deficit.

Improving tax systems and eliminating special regimes that have historically impacted revenue are also key priorities.

Reforming SOEs is crucial to open up more opportunities for private sector, level playing field, and attract foreign direct investment (FDI). These changes are expected to make Pakistan’s economy more export-driven and help to attract new investments.

Together, these measures aim to provide greater predictability, reduce risks, and improve the overall business environment in the country.

The overall goal is to unleash Pakistan’s economic potential, promote sustainable growth, and ensure that the reforms do not negatively impact the current account.

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