Pakistan’s Economic Recovery Strategies and the Role of the IMF (2023–2025)

Abstract

This paper examines the economic recovery plan of Pakistan between 2023 and 2025 including how the IMF involvement helps in the direction of fiscal, monetary, and energy reforms. The objective is to assess how effective these strategies are in the achievement of macroeconomic stability and balancing of growth and welfare. The study utilizes a mixed methods methodology that incorporates a qualitative policy analysis, macroeconomic trend analysis and key-informant interviews. The findings indicate that the balance-of-payments crisis was mitigated through stabilization, such as disinflation and fiscal tightening, and an improved reserve. Nevertheless, trade-offs between austerity policies and social protection that include subsidies and energy reforms are still a challenge. The conclusion reiterates the need to have structural reforms, as in the form of increased taxation and reforms in the energy sector to ensure a sustainable recovery in the future in order to avoid future economic crises.

Keywords: Pakistan; economic recovery; IMF programs; stabilization; fiscal consolidation; balance of payments; social protection