he number of actions the International Monetary Fund has asked the government of Pakistan to undertake to be eligible for the continuation of its ongoing $7 billion loan programme has now reached 64. This is not the end, by the way. The IMF says the latest measures – a set of 11 actions – are aimed at reducing corruption, limiting the influence of powerful elites, improving tax collection, cutting losses in the power sector and strengthening overall governance.

According to the IMF’s staff-level report for the second review, by December next year, Pakistan must publish the asset declarations of senior federal civil servants on a government website. This is meant to help identify gaps between people’s income and assets. The plan will later be extended to senior provincial officers.

The IMF has also asked Pakistan to prepare action plans to reduce corruption risk in 10 key departments. These plans will be led by the National Accountability Bureau. Provincial anti-corruption bodies will be given more powers, including access to financial intelligence, to improve investigations.

Another condition focuses on foreign remittances. Pakistan must assess the true cost of sending money home and identify barriers in cross-border payments by May next year. The remittance costs are expected to rise to $1.5 billion. The remittances are Pakistan’s largest source of foreign exchange.

To address elite control of the sugar industry, the IMF wants a national sugar market liberalisation policy by June next year. This policy will cover pricing, licences, imports, exports and clear timelines.

The poor performance of the Federal Board of Revenue has also drawn IMF attention. The government must finalise a reform roadmap, improve staffing, set clear targets and publish a medium-term tax reform strategy by December next year.

In the power sector, Pakistan must prepare for private sector participation in major electricity companies and sign service agreements. The IMF has warned that if revenues fall short, a mini-budget may be needed, with higher taxes on fertilisers, pesticides and sugary foods.

By the time the next tranche is due, even tougher terms could follow. Pakistan is passing through a challenging economic phase. However, according to the prime minister, the situation is no longer one of unmanaged crisis. Over the last two years, the country has moved from instability toward gradual stabilisation. This was achieved through policy discipline, institutional reforms and focused government action. The emphasis today is on measurable improvement, backed by official figures and structured programmes aimed at restoring confidence, protecting citizens and laying the groundwork for sustainable growth.

According to official accounts, Pakistan’s economy recorded real GDP growth of around 2.7 percent in 2024-25, marking a return to positive growth after a period of contraction and uncertainty. This recovery, though modest, signals that economic activity has restarted across agriculture, industry and services sectors. The government’s stated objective at this stage is not rapid expansion but stability—ensuring that growth does not come at the cost of inflation, external imbalance or fiscal stress.

One of the most important improvements has been in the external account. Pakistan has historically faced recurring balance-of-payments crises due to high imports, limited exports and pressure on foreign exchange reserves. During 2024-25, however, the current account moved into surplus, estimated at about $1.9 billion during the first ten months of the fiscal year. This is a major structural signal because it means the country is earning enough foreign exchange through exports, remittances and other inflows to cover its external payments. A current account surplus reduces pressure on the rupee and lowers the need for emergency external borrowing.

The IMF has also asked the government to prepare action plans to reduce the corruption risk in 10 key departments. These plans will be led by the National Accountability Bureau.

A key driver of this improvement has been remittances by overseas Pakistanis. During 2024-25, remittances reached $38.3 billion, showing an increase of over 26 percent compared to the previous year. These inflows support millions of households, strengthen foreign exchange availability and provide stability to the banking system. Government and State Bank measures to encourage remittances through formal channels, improve payment systems and reduce transaction costs have played an important role in sustaining this trend.

Foreign exchange reserves that had fallen to critically low levels in earlier years, have also shown recovery. State Bank-held reserves stood at around $14.5 billion by December 2025. While reserves remain sensitive to external payments and debt servicing, rebuilding the buffer is essential for confidence in the economy. Stable reserves allow the government and central bank to manage imports, meet external obligations and reduce volatility in the exchange rate.

Inflation, which had severely affected household purchasing power, has eased considerably. By late 2025, inflation had declined to nearly 6 percent, compared to double-digit levels seen earlier. In response to this improvement, the State Bank has reduced the policy interest rate to 10.5 percent, while maintaining a cautious stance to avoid reigniting price pressures. The approach recognises that price stability is not just a macroeconomic target but a social necessity.

Fiscal discipline remains a central pillar of economic management. During the first three quarters of 2024-25, the fiscal deficit was around 2.6 percent of GDP, reflecting improved revenue collection and tighter expenditure control. The government has focused on broadening the tax base, increasing documentation and reducing leakage rather than relying solely on new taxes. Digitisation of tax administration, enforcement against evasion, and rationalisation of exemptions are part of this effort to place public finances on a sustainable footing.

Pakistan’s engagement with the International Monetary Fund has provided both financial support and policy structure. Under the 37-month Extended Fund Facility of about $7 billion, approved in September 2024, Pakistan pledged reforms in taxation, energy, public finance management and governance. During 2025, Pakistan successfully completed programme reviews, enabling the release of around $1 billion under the main facility and an additional $200 million under the Resilience and Sustainability Facility. These inflows are not only a source of financing but also a signal of policy continuity, which helps restore market confidence.

At the same time, the government has prioritised social protection to ensure that stabilisation does not come at the expense of the most vulnerable. Under the Benazir Income Support Programme, assistance coverage has expanded to about 10 million families. The quarterly Kafaalat payment has been increased to Rs 13,500. This targeted support helps offset inflationary pressures on food and essential items and provides a safety net during economic adjustment.

On the trade front, Pakistan’s exports reached about $32 billion in 2024-25. Imports stood at roughly $56.6 billion, resulting in a trade deficit of about $24.9 billion. While the deficit remains significant, the policy focus has shifted toward improving export competitiveness rather than suppressing imports through administrative controls. Steps taken by the government include ensuring energy availability for export industries, simplifying refund mechanisms, reducing port and logistics delays and promoting value-added sectors such as information technology services, engineering goods and processed agricultural products.

Energy sector reform continues to be one of the most critical challenges. High losses, inefficiencies and circular debt have long pressured public finances and industrial costs. The government has initiated measures to improve governance in power distribution companies, reduce theft, align tariffs with actual costs and protect low-income consumers through targeted subsidies. The objective is to make the energy sector financially viable without imposing unsustainable burdens on the budget.

Looking ahead, Pakistan’s path is defined by consolidation rather than experimentation. The immediate task is to protect recent gains by maintaining fiscal discipline, controlling inflation and continuing structural reforms.

The writer is a chartered accountant and a business analyst.