Beyond stabilization: The next challenge for Pakistan’s economy |
https://arab.news/whw85
As the new year dawns, there is finally some good news on the economic front in Pakistan. Celebrating Pakistan’s economic turnaround, Prime Minister Shehbaz Sharif recently told the nation that the economy was finally “out of the woods.”
All major macroeconomic indicators demonstrate that the economy has come a very long way in the last three years when most analysts believed that an economic default was not a question of ‘if’ but when.
A quick review of major economic indicators provides evidence that the government has finally stabilized the economy. Going by official data that compares the economic performance, inflation, despite a slight uptick since July, was hovering at 6.1 percent at the end of November 2025, a huge improvement since inflation hit a historic high of 38 percent in May 2023.
To be sure, a major component of inflation experienced by Pakistani consumers was imported, meaning that an international commodity supercycle as well as a rapidly depreciating exchange rate brought about the price surge. Thankfully, in the last couple of years, a downward trend in international energy prices have certainly assisted in bringing inflation down. The price of oil (Brent crude oil) that had climbed to 97 dollars in September 2023, is........