Pakistan’s economic trajectory has received a significant boost of confidence from the International Monetary Fund (IMF), with the IMF’s Managing Director, Kristalina Georgieva, praising the country’s progress despite ongoing challenges. During her participation in a panel discussion at the AlUla Conference for Emerging Market Economies 2025 in Saudi Arabia, Georgieva expressed optimism about Pakistan’s direction, stating that the country was moving in the “right direction.”
“This is indeed the right trajectory, the right direction to travel,” Georgieva remarked, acknowledging the hard work of Pakistan’s finance team, led by Finance Minister Muhammad Aurangzeb, for their commitment to pursuing sound economic policies. The panel discussion, titled “A Path for Emerging Market Resilience,” was held on the second day of the two-day event, which saw key stakeholders from emerging market economies discuss strategies for resilience and growth in the face of global economic challenges.
Pakistan, which is currently under a $7 billion IMF bailout program, is navigating a challenging economic environment. The country narrowly avoided a sovereign debt default last year, with foreign exchange reserves falling dangerously low and unable to cover even a month’s worth of controlled imports. Despite these challenges, the country’s economic outlook has improved, and Georgieva’s comments underline the importance of Pakistan’s ongoing efforts to stabilize and restructure its economy.
During the session, Finance Minister Aurangzeb shared an update on the country’s economic performance, including a primary surplus in the current fiscal year. He highlighted that one of the key pillars of Pakistan’s economic recovery is the shift towards export-led growth. “We are very clear that if we are to grow sustainably, it has to be export-led growth. We have to fundamentally change the DNA of the economy, and we are working towards that,” he said. This emphasis on exports reflects the government’s efforts to diversify the country’s economic drivers and reduce reliance on unsustainable domestic consumption.
Aurangzeb also pointed to improvements in key macroeconomic indicators, including a reduction in the country’s debt-to-GDP ratio. “The overall debt-to-GDP ratio, which was over 73%, has now come into the mid-60s, and we just need to ensure that we make it sustainable as we go forward,” he added. These improvements come as a result of several fiscal measures implemented by the government, and they offer hope that Pakistan is on the path to long-term stability.
The finance minister also expressed confidence about Pakistan’s positioning for 2025, noting that the country had entered the year with relative macroeconomic stability, a resilient banking sector, and ongoing structural reforms. “We have entered 2025 on a relatively strong note, in terms of macro stability, resiliency of the banking sector, and the bold structural reforms which a number of economies are undertaking at this point in time,” he said. He added that much of Pakistan’s future economic trajectory was within its control, as long as the country remained committed to its reform agenda.
Minister Aurangzeb’s participation in the conference was at the special invitation of Saudi Arabia’s Finance Minister Mohammed Al-Jadaan. The event, which was jointly organized by the IMF and the Saudi Ministry of Finance, aims to provide a platform for emerging economies to discuss strategies for resilience and sustainable growth amid global uncertainties.
Looking ahead, Pakistan is also expecting a three-member IMF mission to visit the country for a Governance and Corruption Diagnostic Assessment as part of the 2024 Extended Fund Facility program. This visit underscores the continued partnership between Pakistan and the IMF as the country works to implement the necessary reforms to secure its economic future.
In conclusion, while challenges remain, Pakistan’s efforts to stabilize its economy and push for structural reforms have earned positive recognition from global financial institutions. With the support of the IMF and continued focus on export-led growth and fiscal responsibility, the country’s economic future appears to be moving toward a more sustainable and resilient path.