Kathmandu. The International Monetary Fund (IMF) on October 14 signed an employee-level agreement to provide financial assistance worth $1.2 billion as Pakistan’s economy improves. This agreement is an important step towards Pakistan’s economic stability.
Pakistan’s economy, which was in a severe financial crisis a few years ago, has achieved strong stability after this agreement. After the IMF’s support, the confidence in the market has returned. This is evidenced by the strengthening of external financial reserves and the easing of government debt risks.
Inflation fell to a six-decade low of 0.3 percent in April 2025 from 38 percent. Pakistan’s central bank is expected to control it by 2024. The interest rate was reduced on May 25. This helped to increase economic activity.
Pakistan has achieved current account savings for the first time in 14 years.
Preparing to return to international markets
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This agreement of the IMF will help Pakistan to return to the international capital market after a long gap. According to Finance Minister Mohammad Aurangzeb, Pakistan is preparing to issue its first green bonds based on Chinese yuan before the end of 2025. In addition, the government plans to issue $1 billion worth of international bonds, including euros, US dollars and Islamic Sukuk bonds.
The Pakistan Stock Exchange (PSP) has seen an encouraging rise in the confidence of domestic investors. By early 2025, the KSE-100 index had risen above 122,000 points, making it one of the world’s best-performing stock markets this year.
Challenges still remaining
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Despite the positive signs, Pakistan still faces some serious challenges. The devastating floods of 2025 have caused huge damage to the agriculture and other sectors. This will affect the projection of the immediate economic growth rate.
Pakistan’s public debt burden is still high. The government will need to continue with the structural reforms needed to address its financial stability through pension reforms.
Overall, the support of the IMF and the government’s commitment towards reform have put Pakistan’s economy on the path of stability and revival.
