Pakistan Affairs

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  Pakistan’s Economy and Upcoming Federal Budget: Challenges and Policy Efforts

  Pakistan’s economy is passing through a critical phase marked by fragile macroeconomic stabilization alongside deep-rooted structural vulnerabilities. The forthcoming federal budget for 2026-27 assumes heightened significance as the country navigates inflationary pressures, external sector risks, IMF conditionalities, and growing demands for inclusive development. This policy brief examines the current state of the economy, outlines the key challenges confronting the budget, and presents policy recommendations aimed at shifting economic management from…

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  Pakistan requires development-focused budget beyond short-term stabilization: IPS seminar

  Pakistan’s upcoming federal budget must move beyond short-term economic stabilization and focus on long-term development priorities including export growth, investment promotion, food security, and reduction in poverty and inequality. Without political will, institutional coordination, structural reforms, and reliable economic data, the country may continue to face stagflation, widening inequality, and growing balance-of-payments pressures. The aforementioned views were expressed by economists and fiscal experts during a discussion on the federal budget…

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  Pakistan Economic Insights (January 2026)

  Pakistan’s economic recovery is gaining momentum faster than anticipated, with large-scale manufacturing rebounding from contraction to 4.8% growth and agriculture expected to contribute positively. Fiscal consolidation of Rs. 2 trillion was achieved primarily through Rs. 1.6 trillion interest payment savings following rate reductions. However, external pressures are mounting as imports surge while exports contract sharply, widening the trade deficit. Remittances remain the only saving grace. Paradoxically, despite massive social protection…

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  Pakistan Economic Insights (October-November 2025)

  Pakistan’s economy in the first six months of FY2025-26 shows a mixed picture of resilience amid mounting strain. Though fiscal consolidation, monetary steadiness, and growth in manufacturing (e.g., automobiles, cement) indicated fundamental fortitude, noteworthy vulnerabilities are increasing. The most serious compression point is the weakening agriculture sector, which grew merely at 0.56% in FY25, intimidating food security and inflation. Simultaneously, the external sector is fading, with a broadening current account…

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