The Economy of Pakistan
Balance-of-Payments Crises and the IMF
Pakistan repeatedly runs out of dollars and turns to the IMF, having entered dozens of programmes since 1958.
A recurring pattern.
The cycle
Imports and debt payments outstrip dollar earnings, reserves fall and the rupee weakens.
IMF programmes
Pakistan has had more than twenty IMF programmes, and completes few of them fully.
Conditions
Requirements include higher taxes, energy price rises and exchange rate flexibility.
Friends
Loans and deposits from friendly countries such as Saudi Arabia, the UAE and China also help.
A near-default
In 2022-23, reserves dropped so low that the country nearly defaulted.
Seeing the IMF as the cause of problems
It usually arrives after the crisis has begun.
Key takeaways
- Dollar shortages recur.
- Many IMF programmes were agreed.
- Conditions are tough.
- Friends provide support.
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