The IMF\u2019s resident representative recently called Pakistan\u2019s reform progress \u201cstrong so far.\u201d It\u2019s the kind of endorsement Islamabad welcomes, especially after last year\u2019s default scare. On the surface, there\u2019s 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.
\nHowever, for most people, the relief hasn\u2019t arrived. Not yet.
\nElectricity 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\u2019t come out of nowhere. The government would be better off admitting they were part of the IMF deal and realising that doesn\u2019t make them any easier to absorb after two years of relentless inflation. The meter doesn\u2019t care about reform logic.
\nStabilisation was necessary. No qualms about that. But these wins haven\u2019t 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.
\nThe 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\u2019t expanding. They\u2019re waiting for the tide to settle.
\nSo yes, the IMF\u2019s nod matters. It unlocked another $1 billion. It calms markets. Sadly, this isn\u2019t recovery. At best, it\u2019s breathing room; the kind that could build into something durable or vanish like it has before.
\nThe 2% primary surplus is an achievement, yet public debt still hovers above 65% of GDP. And the underlying problems\u2013energy inefficiencies, a narrow tax base, fragile exports\u2013haven\u2019t gone anywhere.
\nThe real question now is whether this moment turns into momentum. Whether reforms start reaching the people they\u2019re supposed to help. The IMF is satisfied. But until households and firms feel the shift, the recovery remains theoretical. The hard part starts now.<\/p>\n","protected":false},"excerpt":{"rendered":"
The IMF\u2019s resident representative recently called Pakistan\u2019s reform progress \u201cstrong so far.\u201d It\u2019s the kind of endorsement Islamabad welcomes, especially after last year\u2019s default scare. On the surface, there\u2019s 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 […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":{"0":"post-490285","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-editorial"},"yoast_head":"\n