Pakistan’s economy is on path to long-term recovery, says PM Shahbaz

Tariq Butt, Correspondent / Reuters

Pakistan’s economy is on a path to long-term recovery, thanks to a stabilisation programme backed by the International Monetary Fund (IMF), Prime Minister Shahbaz Sharif said, ahead of a first review of a $7-billion bailout set for early in March.

The comments came in Shahbaz’s meeting on Tuesday with the IMF Managing Director Kristalina Georgieva on the sidelines of the World Government Summit (WGS) 2025 in Dubai, his office said in a statement.

Shahbaz underscored the progress made under the IMF’s Extended Fund Facility (EFF), which has played a key role in stabilising Pakistan’s economy and set it on the path of long-term recovery, it added.

Georgieva has assured Shahbaz Sharif of the lender’s support for the government’s decisive actions during their meeting in Dubai, an official statement issued by the Premier’s office said on Wednesday.

In a post on X, Georgieva said, “Wonderful to meet Prime Minister @CMShehbaz and his team. I am encouraged by their strong commitment to Pakistan’s IMF-supported reforms and support their decisive actions to pave the way to higher growth and more jobs for Pakistan’s youthful population.”

These comments come amid the IMF team’s visit to Pakistan for a week-long scrutiny of the judicial and regulatory system as part of the ongoing $7 billion Extended Fund Facility (EFF) to address governance and corruption vulnerabilities.

The Prime Minister’s Office (PMO) statement said that the premier held a meeting with the IMF chief on the sidelines of the WGS 2025 in Dubai, where both sides discussed Pakistan’s ongoing IMF programme and the macroeconomic stability achieved through the government’s comprehensive reform agenda.

The meeting focused on Pakistan’s commitment to implementing structural reforms and maintaining fiscal discipline, “which had been instrumental in restoring economic stability and would be critical in driving sustainable growth.”

The prime minister talked about the progress made under the programme, attributing the economic progress to the bailout deal. He reaffirmed the government’s resolve to sustain reforms, particularly in tax reforms, energy sector efficiency, and private sector development.

The IMF chief commended Pakistan’s efforts “in effectively implementing the IMF-supported programme, highlighting the country’s improving economic performance with rising growth and declining inflation,” per the statement.
Georgieva recognised that Pakistan was “on the path to growth and has undergone economic recovery,” further reiterating the IMF’s support for its reform agenda.

The premier was in the UAE alongside Foreign Minister Ishaq Dar on a two-day visit to participate in the World Governments Summit.
Raising hopes for much-needed relief to financially strained masses, Shahbaz on Wednesday said the International Monetary Fund (IMF) had conveyed that it would not oppose a reduction in electricity prices. Inflation-stricken consumers in Pakistan have been grappling with unaffordable power tariffs in recent years. These spikes have stirred social unrest and shuttered industries in the $350 billion economy, which has contracted twice in recent years as inflation hit record highs.

“The global lender’s chief has assured that Pakistan’s plan for lowering power tariffs will be given due consideration,” the premier said while sharing details of his recent visit to Dubai with a federal cabinet meeting.

Addressing the meeting Shahbaz said in his meeting with the IMF’s managing director in Dubai he discussed the challenges faced by Pakistan’s power sector at length. “I told her that industries can thrive and economic growth can be achieved only if production costs are reduced,” he said, adding that the IMF official gave a positive response to his proposal.

“The concern that the IMF would not accept a power tariff reduction has now been dispelled,” PM Shahbaz said, adding that the international lender has invited Pakistan to present its plan for lowering electricity prices.