Pakistan has been making steady progress with the International Monetary Fund (IMF) to secure a $7 billion Extended Fund Facility (EFF) aimed at bolstering its economic reserves and sustaining the government’s fiscal operations. This follows the completion of a previous $3 billion loan programme in April, alongside credit rating upgrades from both Moody’s and Fitch last month.

While securing an IMF loan does not inherently signify a thriving economy – in fact Pakistan’s reliance on the IMF underscores the fragile state of its financial situation - the smooth progress of the agreement between Pakistan and the IMF suggests the country has implemented the necessary measures to obtain the EFF. These include raising its tax revenue target by 40%, increasing energy prices to meet IMF conditions, and enacting policies to reduce subsidies, increase tariffs, and cut government spending—particularly in inefficient state-owned enterprises. IMF spokesperson Julie Kozak’s statement, expressing satisfaction with Pakistan’s consistent policymaking that has led to increased economic stability, resumption of growth, and a significant rise in international reserves, highlights the success of the PML-N government’s economic reforms.

While these improvements in long-term economic indicators and positive comments from the IMF should be seen as a marker of success for the PML-N, it is essential to recognise that an IMF programme alone is not the ultimate solution for economic recovery. It is merely a crucial step that buys time for Pakistan to restructure its economy. True success will be achieved only if, by the end of the IMF programme, Pakistan manages to build its reserves and reform its economy to avoid the need for future IMF interventions.

Judging by the IMF’s assessment, Pakistan appears to be on the path to achieving that goal.