Each time Pakistan enters an IMF program, the same sequence unfolds. Foreign exchange reserves stabilise, the current account deficit narrows, the currency becomes less volatile, and policymakers speak of restored confidence. From a macro-financial standpoint, these outcomes signal success. Yet beyond the balance sheet, the economy experienced by households, firms, and workers remains strained. This recurring disconnect points to a fundamental reality Pakistan has yet to internalise: IMF programs are designed to fix balance sheets, not economies.

The IMF’s mandate is narrow and explicit. It exists to prevent disorderly defaults, restore external solvency, and stabilise macroeconomic indicators that matter to international creditors. In Pakistan’s case, this has typically involved fiscal consolidation, exchange rate adjustment, energy price rationalisation, and tight monetary conditions during crisis phases. These measures compress demand, reduce imports, rebuild reserves, and improve headline indicators. On paper, the arithmetic works. What these programs are not designed to do is generate productivity-led growth, employment, or structural transformation. Expecting them to deliver these outcomes reflects a misunderstanding of their purpose. Stabilisation is not development; it is a precondition for it. The danger arises when stabilisation is mistaken for recovery and short-term calm is confused with long-term health.

Pakistan’s recent experience illustrates this distinction clearly. Over the past 12 to 28 months, headline inflation has eased substantially from crisis-era peaks, and monetary tightening has reached a plateau after an extended cycle. From a stabilisation perspective, this marks progress. Inflation expectations have softened, exchange rate pressures have reduced, and macro volatility has declined. Yet the easing of inflation and the stabilisation of interest rates have not translated into a broad-based economic recovery. Investment remains subdued, credit growth is weak, and employment generation is limited. Monetary tightening and subsequent easing restore macro order, but they do not automatically revive growth engines that were structurally impaired long before the........

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