State of the economy-                    Author – Sakib Sherani

Pakistan’s economic tale reads like a broken record, with yet another IMF programme leading the country down a familiar path of short-term stabilisation at the expense of long-term well-being. But this time, the tune is more tragic. The latest IMF deal is the harshest yet, bringing the economy to its knees and forcing millions into poverty and joblessness. The celebration of macroeconomic “stability” by the government rings hollow against the grim backdrop of rising unemployment, collapsing purchasing power, and a rural sector gasping for air. The numbers speak for themselves as unemployment at a staggering 22 percent, youth joblessness at an unprecedented 29 percent, and nearly 45 percent of the population slipping below the poverty line. All this while ordinary Pakistanis are left to carry the cross of economic reforms crafted in air-conditioned rooms.

Beneath the surface, there’s a disturbing dissonance between official optimism and public agony. The IMF’s push for fiscal discipline has, in reality, drained the lifeblood of economic growth. Agriculture has withered, factories have shut down, and the once-thriving middle class is barely treading water. Meanwhile, the IMF and its allies continue to paint a rosy picture to salvage reputations and secure geopolitical alignments. With purchasing power plummeting by 58 percent since 2022, the myth of recovery is simply smoke and mirrors. What we’re seeing is not reform, but a rebranding of hardship—a cleverly spun narrative that masks the IMF’s policy failures and the state’s abdication of its social responsibility.

Overview:

The article examines the ongoing IMF programme in Pakistan, exposing its destructive economic consequences despite official claims of stabilisation. It paints a bleak picture of mass unemployment, deepening poverty, shrinking growth, and collapsing purchasing power, all driven by extreme austerity measures.

NOTES:

The article highlights a grim economic picture of Pakistan. It shows how the country has entered its 14th IMF programme since 1988, yet continues to grapple with the same underlying issues of fragile growth and rising inequality. It underscores that while the government is busy celebrating macroeconomic stability, this so-called achievement has come at an unprecedented human cost. Unemployment has skyrocketed to 22 percent, with youth joblessness peaking at 29 percent, and over 18 million people officially out of work. The World Bank reports that nearly 45 percent of Pakistanis now live below the poverty line of $4.2 per day, with an additional 12.8 million people falling into poverty since 2022. Real GDP growth has slumped to an average of just 1.7 percent over three years, the lowest since 1952, and all sectors such as agriculture, manufacturing, and services are either shrinking or stagnating. The article also points out the steep 58 percent fall in purchasing power since March 2022, meaning the middle class can no longer sustain a decent standard of living. It criticizes the IMF’s anti-growth austerity measures that have devastated industries, ruined farm incomes, and widened the gap between the elite and the masses. Additionally, it questions the credibility of international financial institutions, exposing how career and institutional incentives push them to exaggerate success and ignore real human suffering.

Related CSS Syllabus Topics:

• Pakistan Affairs: Economic challenges, IMF programmes, Poverty, Unemployment
• Current Affairs: Role of international institutions in domestic policy
• International Relations: Influence of Bretton Woods Institutions

Notes for beginners:

The article highlights how international loans, especially from the IMF, come with strings attached. For example, to get a loan, Pakistan had to reduce its spending and increase taxes, which hurt common people. Unemployment rose from 6.3% in 2021 to 22% by 2025. That means if there were 100 people working in 2021, now 22 of them are jobless. The poverty line is $4.2/day, and now almost half the population earns less than that. Imagine earning Rs50,000 in 2022 but being able to buy goods worth only Rs20,800 today. That’s how hard inflation and reduced income have hit.

Facts and Figures:

• 22% unemployment rate (18 million people)
• Youth unemployment: 29%
• 45% population below poverty line ($4.2/day)
• Additional 12.8 million pushed into poverty since 2022
• GDP growth averaged only 1.7% since 2022
• Agriculture and manufacturing sectors declined significantly
• Purchasing power fell by 58% since March 2022

To sum up, The article pulls back the curtain on the much-hyped economic stability narrative and reveals a reality marred by mass misery and shrinking livelihoods. It’s a wake-up call for policymakers and citizens alike, urging a rethinking of our economic direction and the cost of depending on international financial institutions. The numbers don’t lie but Pakistan’s economic wounds are deep, and band-aid policies won’t heal them.