Pakistan’s relationship with the International Monetary Fund has shaped the country’s economic story for more than six decades.
For many citizens, the IMF symbolises rising prices, strict conditions and economic pressure.
For the policymakers, it represents emergency support when the country faces the risk of default.
The debate over whether this relationship reflects dependency or necessity continues, especially as Pakistan again relies on the IMF assistance to manage its fragile economy.
Pakistan first turned to the IMF in 1958, barely a decade after independence.
Since then, it has entered more than 20 IMF programmes, making it one of the most frequent IMF borrowers in the world.
These programmes have included short-term standby arrangements, longer extended fund facilities and emergency lending during global or domestic crises.
Over time, the IMF has become a recurring presence in Pakistan’s economic management, often stepping in when foreign exchange reserves fall sharply and external payments become difficult to manage.
Since its inception, the total amount of IMF financing approved for Pakistan is estimated to be between $40 and $45 billion.
Not all of this money was drawn at once or even fully utilised, as some programmes ended early due to political changes or failure to meet conditions.
Nevertheless, the figure shows the scale of the IMF’s involvement in Pakistan’s economy over the long term.
At the same time, Pakistan has repaid a substantial portion of this assistance.
Estimates suggest that around $30 to $35 billion has been repaid to the IMF over the years.
Pakistan has generally met its repayment obligations on time, even during periods of severe economic stress, because maintaining credibility with the IMF is key for future access to international support.
These repayments highlight a key issue that the problem is not simply unpaid debt, but the inability to resolve the structural weaknesses that cause repeated crises.
Each IMF programme provides temporary relief, but once it ends, old problems often reemerge.
This cycle fuels the argument that Pakistan is trapped in a pattern of dependency.
In recent years, Pakistan’s economic challenges have become more severe. By 2024-25, government debt had risen to around 73 per cent of gross domestic product.
This high level of debt limits the government’s ability to spend on development and social services.
Inflation remained elevated, eroding household incomes and increasing poverty.
Economic growth has been weak, making it harder to create jobs for a young and growing population.
One of the most serious problems has been the shortage of foreign exchange.
Pakistan relies heavily on imports for fuel, machinery, medicines and even some food items.
When foreign exchange reserves fall, the country struggles to pay for these imports.
At several points in recent years, forex reserves dropped to the levels that covered only a few weeks of imports.
In such situations, the risk of default rises sharply, and confidence in the economy collapses.
The IMF loans help rebuild reserves and restore a minimum level of stability.
The most recent IMF programme, approved in late 2024, provided around $7 billion over three years.
Its purpose was to stabilise the economy, reduce inflation, improve public finances and encourage structural reforms.
As with the previous programmes, the IMF support also helped Pakistan secure additional financing from other international partners, who often wait for the IMF approval before committing funds.
This shows how central the IMF has become to Pakistan’s external financing strategy.
Supporters of the IMF engagement argue that Pakistan has little alternative.
Domestic savings are low, the tax base is narrow, and investors’ confidence is fragile.
Borrowing from the international markets is expensive due to high interest rates and perceived risk.
Friendly countries can offer support, but not indefinitely. In this context, the IMF financing is often the only realistic option during crises.
It provides relatively low-cost funding and a framework for economic stabilisation.
The IMF programmes also aim at addressing longstanding problems.
These include poor tax collection, inefficient energy pricing, large subsidies and loss-making state-owned enterprises.
In theory, reforms in these areas could strengthen Pakistan’s economy and reduce the need for future bailouts.
Better tax collection would increase government revenue, while energy reforms could reduce fiscal losses.
Stronger institutions could improve governance and investors’ confidence.
However, critics argue that these reforms are rarely implemented.
Political pressures often lead governments to delay or reverse unpopular measures, such as raising taxes or cutting subsidies.
As a result, reforms remain incomplete. When a programme ends, fiscal pressures build again, leading to renewed balance of payments problems and another return to the IMF.
This repeated pattern is seen by many as evidence of dependency.
The social cost of the IMF-backed policies is another major concern.
Measures such as higher fuel and electricity prices directly affect households.
Inflation has already placed a heavy burden on ordinary people, especially those on fixed or low incomes.
While the IMF programmes usually include provisions to protect the poorest, many families still experience hardships.
This fuels public anger and strengthens the perception that the IMF involvement worsens everyday life.
There is also criticism that the IMF programmes focus too heavily on austerity and stabilisation, while giving less attention to growth and development.
Pakistan needs investment in education, skills, technology and infrastructure to raise productivity and expand exports.
Without these, economic growth remains weak, making debt harder to manage.
Some economists believe that excessive fiscal tightening can slow growth, creating a vicious cycle where weak growth leads to more borrowing.
At the same time, it is important to recognise Pakistan’s own role in this situation.
Economic problems are rooted in domestic issues such as weak governance, political instability and inconsistent policymaking.
Frequent changes in government disrupt long-term planning. Powerful interest groups resist taxation and reform.
In such an environment, even well-designed IMF programmes struggle to achieve lasting results.
The IMF can provide advice and funding, but it cannot replace political will.
Pakistan has tried to reduce its reliance on the IMF support by seeking other sources of foreign exchange.
Remittances from overseas Pakistanis have become a lifeline, bringing in billions of dollars each year.
The government has also explored new export opportunities and closer economic ties with regional partners.
While these efforts have helped, they have not been enough to eliminate the need for IMF assistance.
Looking ahead, Pakistan’s need for external financing is likely to stay high.
In the coming years, the country will require substantial funds to meet external debt repayments and pay for essential imports.
Unless there are clear improvements in exports, productivity and government revenue, reliance on external support will remain unavoidable.
This suggests that the IMF involvement is unlikely to end soon.
The question of dependency versus necessity does not have a simple answer.
In the short-term, the IMF support is often necessary to prevent economic collapse and protect the country from default. Ignoring this reality would be dangerous.
At the same time, repeated reliance on the IMF programmes without resolving core problems does suggest a form of dependency that Pakistan has struggled to escape.
Breaking this cycle will require difficult and sustained reforms.
Expanding the tax base, improving governance, investing in human capital and promoting export-led growth are necessary.
These steps are politically challenging, but without them, Pakistan will continue to move from one crisis to another.
If the IMF programmes are used as a bridge to genuine reform rather than a temporary fix, Pakistan’s relationship with the IMF can evolve into a transitional phase rather than a permanent condition.
Until then, the IMF will remain both a necessary lifeline and a reminder of the work still needed to achieve lasting economic stability.
The writer is a seasoned journalist and a communications professional.
He can be reached at tariqkik@gmail.com
