IMF Loan Programs and Pakistan: Impact and Way Forward (2013 to 2026)

Abstract

This study is an exploration of frequent approach of Pakistan to the International Monetary Fund (IMF) with a lens on the efficacy of its Extended Fund Facility (EFF) loans. It includes historical background (1958-2013), with the constant economic difficulties and reliance on the IMF. A particular focus is paid to the EFF 2013-16, which can be regarded as the only successful program, though it cannot guarantee its long-term stability. In the core analysis, it looks at the current EFF 202426 and its agreed conditionalities, the performance benchmarks, and how it fits international best practices. The two fundamental questions asked in the research are: Why can Pakistan go back to the IMF after initial success? And how would this affect the economy, given that the current program is carried to its full extent? The research analyzes the feasibility of sustainable expansion of the 2024-26 program based on qualitative research and secondary information. It ends with recommendations to policy to enhance the governance of the economy, address fiscal deficit, and end the chain of external financial assistance.