The Asian Development Bank (ADB) highlighted in its recent Asian Development Outlook report that the economic reform agenda, supported by the IMF Extended Fund Facility in Pakistan, is expected to boost growth and curb inflation. The report mentioned that Pakistan’s growth had increased to 2.4% in the fiscal year 2023-24, with the previous IMF loan aiding economic stability.
The new three-year, $7 billion aid package from the IMF aims to attract additional international financial support for economic stabilization and reforms. The program targets improving macroeconomic stability, public finances, social spending, foreign reserves, and the business environment to foster private sector-led growth.
Despite positive outlooks, the report warned about risks related to external financing and policy implementation, which could impact the exchange rate. Climate-induced disasters, geopolitical developments, high debt-to-GDP ratios, and elevated interest payments also pose challenges for Pakistan’s economic outlook.
However, with committed structural reforms and fiscal discipline, Pakistan aims to reduce interest payments and create space for essential social and development spending in the medium term.
