The IMF’s resident representative recently called Pakistan’s reform progress “strong so far.” It’s the kind of endorsement Islamabad welcomes, especially after last year’s default scare. On the surface, there’s reason to nod. The rupee has held around 278. Reserves are above $10 billion. Inflation is down to 12.6%. The government posted a primary surplus of 2% of GDP, and the current account has been in surplus for months.
However, for most people, the relief hasn’t arrived. Not yet.
Electricity tariffs have gone up about 30% over the last year. Gas charges have risen by 50% for protected households and more for industrial users. These hikes didn’t come out of nowhere. The government would be better off admitting they were part of the IMF deal and realising that doesn’t make them any easier to absorb after two years of relentless inflation. The meter doesn’t care about reform logic.
Stabilisation was necessary. No qualms about that. But these wins haven’t moved beyond the balance sheets. Private sector credit has shrunk by over Rs 200 billion this fiscal year. Banks are lending to government, not businesses. Industry is running below 65% capacity. Consumer demand is weak, even in seasons that usually see a spending bump.
The policy rate held at 22% for most of the year and has only just dropped to 20.5%. Credit remains expensive. Investment appetite is thin. Most businesses aren’t expanding. They’re waiting for the tide to settle.
So yes, the IMF’s nod matters. It unlocked another $1 billion. It calms markets. Sadly, this isn’t recovery. At best, it’s breathing room; the kind that could build into something durable or vanish like it has before.
The 2% primary surplus is an achievement, yet public debt still hovers above 65% of GDP. And the underlying problems–energy inefficiencies, a narrow tax base, fragile exports–haven’t gone anywhere.
The real question now is whether this moment turns into momentum. Whether reforms start reaching the people they’re supposed to help. The IMF is satisfied. But until households and firms feel the shift, the recovery remains theoretical. The hard part starts now.
