Pakistan has once again secured major financial backing from the International Monetary Fund (IMF), but economists warn that the inflow offers only short-lived
comfort unless long-delayed reforms finally take root. According to IANS, the country has received a $7 billion Extended Fund Facility (EFF) spread over 37 months, alongside $1.4 billion from the Resilience and Sustainability Fund (RSF). Under a staff-level agreement reached in October, $1 billion from the EFF and $200 million from the RSF are set for release, bringing total disbursements under both arrangements to $3.3 billion so far. While the funds help stabilise reserves and avert immediate balance-of-payments pressure, analysts argue that Pakistan’s repeated reliance on IMF programs underscores chronic structural weaknesses rather than sustainable recovery, added the report. Short-Term Stability, Long-Term Dependence Financial experts note that IMF support typically acts as a stopgap, easing liquidity stress without fixing the underlying causes of economic fragility. Pakistan has entered multiple IMF programs over the decades, yet implementation gaps and policy reversals have undermined their effectiveness. As a result, each bailout cycle deepens dependence on external financing instead of building domestic resilience, claims the report. What the IMF Actually Pushes For Contrary to popular perception, the IMF does not directly run domestic policymaking. Its focus remains on narrowing fiscal deficits, broadening the tax base, boosting revenue, and cutting inefficient subsidies. However, successive governments have opted for politically expedient choices rather than equitable reforms. The burden has largely fallen on the salaried class and ordinary consumers, while powerful sectors such as agriculture, real estate, and retail continue to enjoy tax exemptions. Reports suggest that barely 2 per cent of Pakistan’s population pays income tax, highlighting the imbalance in revenue collection. Governance Gaps and Corruption Concerns An IANS report noted that in November 2025, the IMF proposed a 15-point reform agenda aimed at tackling corruption and weak accountability. The IMF’s Governance and Corruption Diagnostic Report flagged serious issues in budget credibility. Projects frequently receive approval without assured funding, resulting in stalled execution, delays, and escalating costs that strain public finances. Rising Expenditure, Weak Oversight Despite calls for austerity, Pakistan’s National Assembly approved an additional 9.4 trillion rupees in spending for 2024–25, which is nearly five times higher than the previous year. Lawmaker-controlled constituency development funds further complicate capital allocation and monitoring, increasing the risk of inefficient or improper use of public money. Political Will And Widening Inequality Ultimately, analysts argue that the core challenge is not IMF conditionality but the absence of political resolve. Government expenditures continue to expand, subsidies remain poorly targeted, and elite privileges stay intact. Meanwhile, pensioners and low-income consumers face mounting pressure. The report states that inequality is especially visible in the energy sector, where fixed charges replace usage-based billing, disproportionately hurting poorer households. Although the IMF advocates cost recovery, choices such as progressive tariffs and lifeline slabs lie squarely with Pakistan’s leadership. Both the IMF and FATF have stressed the importance of data-driven safeguards and anti-corruption measures, but tangible progress has been slow.
