Economic Pressure
Economic Pressure: The International Monetary Fund (IMF) has approved Pakistan’s latest programme review. This comes during global economic instability. The Middle East tensions have raised energy prices. Pakistan imports most of its energy, so it feels pressure. The new IMF tranche gives short-term relief.
IMF Conditions
The approval was expected because Pakistan follows most programme conditions. However, the IMF did not approve it automatically. The government accepted several new conditions. It agreed to keep tight monetary policy even under pressure to cut interest rates. The IMF wants to control inflation. It fears that higher energy prices will spread into the economy. Pakistan must focus on stability instead of growth.
Fiscal Discipline
The government also agreed to cut untargeted energy subsidies. This decision will affect lower-income groups. Pakistan also promised a primary budget surplus of 2% of GDP. These steps show strict financial discipline.
This stability does not show real economic strength. Pakistan still depends on external loans. Its growth does not come from strong exports or productivity. This makes the economy fragile.
Repeated Economic Cycle
Pakistan has followed a repeated pattern. It follows IMF rules under pressure. It gains short-term stability. Then it relaxes reforms when pressure reduces. This cycle weakens long-term progress.
Global conditions are now more uncertain. Oil prices can rise further. This will increase import costs. It will also reduce reserves and raise inflation. If Pakistan relaxes discipline too early, it will lose stability.
Need for Structural Reform
The main problem is deeper than IMF programmes. Pakistan cannot depend on loans forever. It must improve energy efficiency. It must also increase exports.
The global economy will stay uncertain. External funding may become harder to get. Pakistan’s stability will depend on real reforms, not short-term financial support.
Published in Dawn, 10th May 2026
