IMF steers Pakistan toward stability, export-led expansion

January 30, 2026 (MLN): Pakistan is actively negotiating with the International Monetary Fund (IMF) to design a strategy aimed at accelerating economic growth, following the country’s successful stabilization through stringent fiscal and monetary measures.

Prime Minister Shehbaz Sharif said the country is now ready to transition from crisis management to sustainable, export-driven expansion.

Speaking at a high-profile event in Islamabad, PM stressed the importance of aligning capital allocation with industrial development.

“It is time to channel resources toward supporting local industry,” he remarked, emphasizing that the central bank and finance ministry must take decisive action and consider the perspectives of business leaders to unlock growth potential.

The Prime Minister recounted the critical role of diplomacy in averting a sovereign default in 2023, recalling a decisive meeting with IMF Managing Director Kristalina Georgieva in Paris.

“Despite the urgency, I gave my word of honor that Pakistan would fully implement the required reforms. That commitment was pivotal in saving the country from default,” he said.

PM also revealed a series of measures to further stimulate economic activity. He cuts the refinance rate by 300 basis points, lowering it from 7.5% to 4.5%, while simultaneously reducing electricity wheeling charges by Rs4.04 per unit to Rs8.51.

The government also adjusted the Export Refinance Scheme (ERF), reducing financing rates to Policy Rate minus 6%, enhancing support for exporters and promoting investment.

Market experts noted that these initiatives, supported by a recent 1% cut in the Cash Reserve Requirement that released over Rs300bn into the banking system, strengthen liquidity while preserving financial sector stability.

Industry leaders, including Musadaq Zulqarnain of Interloop Limited, hailed the reforms as “timely and well-calculated,” highlighting that they impose no additional fiscal burden.

The IMF has consistently emphasized Pakistan’s potential for higher growth if governance reforms are implemented effectively.

Its Governance and Corruption Diagnostic Report urged the country to adopt a 15-point reform agenda, improve transparency in public procurement, strengthen parliamentary oversight, and close systemic loopholes in anti-corruption institutions.

The Fund projected that these reforms could lift Pakistan’s growth rate to 5–6.5% over the next five years, reduce inefficiencies, and curb entrenched elite capture in policy-making.

Pakistan’s progress under the IMF’s Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) is being closely monitored, with fresh disbursements totaling $1.2bn expected upon approval.

These funds are anticipated to bolster foreign exchange reserves and support the broader objective of sustainable economic recovery.

Prime Minister Sharif’s recent initiatives, combined with structural reforms advocated by the IMF, signal a focused effort to stabilize Pakistan’s economy, enhance industrial competitiveness, and lay the groundwork for export-led growth in the coming years.

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