April 26, 2025 (MLN): Pakistan’s economy is on track to rebound with a 2.4% growth rate in 2025, reversing last year’s contraction of 0.2%, according to Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF).
Speaking at a briefing, Azour said the recovery is being supported by a comprehensive reform package to achieve fiscal sustainability, boost revenues, and restructure state-owned enterprises (SOEs) to create more space for private sector growth and foreign direct investment (FDI).
Growth is projected to accelerate further to 3.2% next year.
He added that inflation, which soared to 29% in 2024, is expected to fall sharply to 12.6% this year and moderate further to 10.6% in 2026.
The government's reform agenda focuses on widening the tax base, improving revenue quality, and phasing out special tax regimes. Efforts to overhaul SOEs are also underway to level the playing field for private businesses and enhance investment inflows.
Monetary policy, meanwhile, is helping curb inflation and easing restrictions on capital flows and exchange rate transfers, Azour said.
These measures, combined with broader reforms, are expected to enhance economic predictability, lower current account risks, and unlock Pakistan’s export potential.
“The reform package aims not only to stabilize the macroeconomic environment but also to unleash the economy’s potential without putting undue pressure on the current account,” Azour noted.
