olitics and economics are often treated as separate worlds in Pakistan’s public discourse. However, the country’s recent history shows that the two are deeply intertwined. No political slogan, however popular, can survive prolonged economic mismanagement; no economic decision is ever free from political consequences. The experience of Pakistan Tehreek-i-Insaf government (2018-2022) is a telling case study of how hesitation, mixed messaging and ideological posturing can cause manageable economic stress to turn into full-blown instability.

When the PTI assumed power in 2018, it inherited certain economic challenges. The current account deficit was widening; foreign exchange reserves were under pressure; and public debt had risen sharply. These were major issues. A fair analysis must acknowledge that structural weaknesses had accumulated over years. Yet what distinguished the early PTI period was not the scale of the inherited problem but the government’s refusal initially to confront it realistically. Key government leaders framed engagement with the International Monetary Fund as national humiliation rather than an economic instrument. This political narrative may have appealed to a frustrated electorate, but it sent damaging signals to markets, investors and international partners.

Economic data from that period tells a sobering story. As uncertainty deepened, the rupee came under sustained pressure, losing significant value within months. Foreign exchange reserves declined to levels that barely covered a few weeks of imports, forcing the State Bank to impose administrative controls that distorted market functioning. Inflationary pressures began to build, eroding purchasing power. Business confidence weakened due to the absence of a clear macro-economic roadmap. Independent economists warned at the time that delaying an IMF programme would increase its eventual cost, both financially and politically.

The hesitation intended to project sovereignty ended up producing the opposite outcome. By mid-2019, the government had little choice but to approach the IMF under far harsher conditions than might have been negotiated earlier. Pakistan entered into a programme that required steep adjustments, including aggressive fiscal consolidation, withdrawal of energy subsidies and a market-driven exchange rate regime. IMF staff reports later noted that delays had exacerbated vulnerabilities, narrowing policy space and increasing adjustment pain. What could have been a managed stabilisation turned into shock therapy for an already stressed economy.

This episode also exposed the dangers of treating economic policy as an extension of political messaging. Frequent changes in the finance team, contradictory public statements and attacks on economic institutions undermined credibility. At one point, senior ministers publicly questioned the competence of the State Bank and the IMF, even as negotiations were under way. The mixed signals deepened investor anxiety and weakened Pakistan’s negotiating position. As former central bankers and policy analysts pointed out in newspaper columns at the time, markets respond not just to numbers but also to coherence and predictability that were in short supply.

Beyond macroeconomic instability, the social consequences were severe. Inflation accelerated, particularly in food and energy, hitting lower- and middle-income households hardest. According to data from the Pakistan Bureau of Statistics, consumer prices rose sharply during this period while real wages stagnated. Business closures increased, especially among small and medium enterprises that lacked buffers against volatility. The political leadership continued to frame these hardships as temporary sacrifices for a promised future transformation, but for millions of citizens, the costs were immediate and tangible.

It is important to note that IMF programmes are never popular; nor are they inherently virtuous. They are tools, not solutions. Their success depends on domestic ownership and competent implementation. The PTI government’s experience illustrates how delay, denial and politicisation can worsen outcomes. By initially rejecting engagement with the IMF on ideological grounds, the government lost precious time and credibility. When it finally approached the Fund, it did so from a position of weakness, having already absorbed economic chaos without securing stability or relief.

Established economic authorities repeatedly stressed this point. The IMF itself, in subsequent programme reviews, emphasised the need for early corrective action and consistent policy signals. Former finance ministers and respected economists writing in leading newspapers argued that economic sovereignty is not preserved by avoiding institutions, but by engaging them strategically while pursuing domestic reforms. Even business chambers warned that uncertainty was more damaging than tough but predictable adjustment measures.

The political cost of this economic mismanagement was equally significant. As inflation soared and growth slowed, public frustration intensified. The government’s early claims of self-reliance rang hollow against the reality of repeated IMF reviews and emergency financing. The eventual breakdown of the political consensus around economic policy contributed to broader instability, affecting governance and institutional trust. In this sense, the PTI period demonstrates how economic policy failures can accelerate political fragmentation.

There are lessons here that go beyond partisan debate. Economic reform in Pakistan requires honesty about constraints, continuity across governments and respect for institutions. No administration, regardless of popular mandate, can defy balance-of-payments arithmetic. Political bravado may win applause at rallies, but it cannot stabilise reserves, control inflation or restore investor confidence. These outcomes require disciplined policy, timely decisions and coordination between political leadership and economic managers.

For current and future policymakers, the message is clear. Economic crises do not wait for political comfort and delayed decisions often carry heavier costs. Pakistan’s engagement with international financial institutions should be pragmatic rather than performative, grounded in national interest rather than political symbolism. Criticism of past mis-steps is necessary not for point scoring, but to avoid repeating the same errors under new slogans.

Ultimately, the intersection of politics and economics demands maturity. Democracies are tested not only by how leaders win power, but also by how responsibly they exercise it under pressure. The PTI government’s initial reluctance to confront economic reality, followed by a forced and humiliating return to the IMF, is a cautionary tale. If Pakistan is to break its recurring cycle of crisis and adjustment, it must replace economic populism with policy seriousness, and political theatre with institutional respect. Only then can economic stability support democratic continuity rather than undermine it.

The writer is a trading analyst.