The International Monetary Fund (IMF) has said that Pakistan’s economy is showing signs of recovery due to the government’s continued policy reforms and financial discipline.
In its latest review report under Pakistan’s Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF), the IMF said strong economic policies have helped improve investor confidence and made Pakistan’s economy more stable against external challenges.
According to the report, Pakistan’s economy showed better performance during the first half of fiscal year 2026. The IMF noted that GDP growth improved, inflation remained under control, the current account stayed mostly balanced, and foreign exchange reserves recovered faster than earlier expectations.
However, the IMF also warned that rising tensions and conflict in the Middle East could create fresh economic pressure in the coming months. The report said the regional situation may increase inflation, affect economic growth, and put pressure on Pakistan’s external payments position.
Despite these concerns, the IMF believes the overall economic impact may remain manageable if current reforms continue. However, it also made clear that global uncertainty and regional risks are still major challenges for Pakistan’s economic outlook.