Pakistan’s IMF programme dilemma revolves around its ongoing struggle with economic support from the International Monetary Fund (IMF) and why these programmes often feel like temporary fixes instead of real solutions. Currently, Pakistan is part of a $7 billion IMF Extended Fund Facility (EFF) programme, started in late 2024, aimed at stabilising the economy through strict financial rules. However, over the years, such programmes have become a repeating pattern rather than a lasting solution.
One major concern is that the IMF’s conditions often focus on reducing government spending, raising taxes, weakening the currency, and increasing interest rates. These measures are intended to quickly balance the country’s budget, but many experts argue they slow down economic growth and make daily life more difficult for ordinary citizens. Meanwhile, Pakistan’s plans to create jobs, strengthen industries, and boost productivity remain limited or underdeveloped, making IMF-imposed measures even less effective.
The dilemma also reflects a difference in economic approaches. The IMF tends to prioritise austerity, aiming to control inflation and government debt in the short term. Economists in Pakistan, however, often recommend long-term growth-focused strategies, such as lowering taxes for businesses, encouraging private investment, simplifying regulations, and promoting free trade. These supply-side policies are believed to strengthen the economy sustainably and improve living standards, but they are usually outside the IMF’s requirements and have not been fully implemented in Pakistan.
As a result, Pakistan often ends up in a vicious cycle: it borrows from the IMF, follows strict conditions, experiences slow growth and social hardships, and then ends up needing another programme. It’s similar to trying to fix a broken car by tightening its bolts repeatedly instead of repairing the engine problems keep coming back.
The dilemma is whether Pakistan should continue relying on IMF programmes with strict short-term conditions or focus on long-term economic strategies that may take time to implement but can provide more sustainable growth and stability in the future.
