Pakistan’s Economic Recovery Deserves Recognition, Not Reduction to a Political Label

The Financial Times asks whether Pakistan’s “military government” can make the economy grow. The article’s own evidence answers that question: the economy is already recovering. Pakistan is back in international capital markets, reserves have been rebuilt, inflation has fallen sharply from its 2023 peak, and investors are lining up to buy Pakistani debt. A headline built around a political label cannot erase those results.

In September, Pakistan raised $3 billion in a dual-tranche Eurobond, the largest single international bond transaction in its history. Orders reached nearly $6 billion, roughly double the amount on offer. Sovereign bond buyers do not lend on sentiment or political fashion. They price repayment capacity, external financing needs and risk, and then commit capital. Pakistan has a history of IMF dependence, and the market looked at it anyway and chose to buy.

This was not a one-off. Pakistan returned to the Eurobond market in April, issued its first panda bond, and has now diversified its funding sources well beyond the narrow base it once relied on.

Inflation peaked at 38 per cent in May 2023, a level that crushed household budgets and business planning. It fell to single digits and now sits at 10.3 per cent, a figure pushed up by the shock of the Iran war, not by domestic policy failure. State Bank of Pakistan reserves reached about $21.4 billion in September. In 2022 the country was close to default.

The economy has also returned to growth. S&P puts FY2026 growth at 3.6 per cent, the third consecutive year of expansion after the FY2023 contraction.

In July, S&P upgraded Pakistan to B, the country’s highest rating in a decade. Its stated reasons deserve attention: stronger institutional stability, sustained implementation of IMF-backed reforms, improved fiscal performance and stronger external buffers. This is a credit assessment by an independent agency, and it credits the very institutional arrangement the FT treats as a liability.

The FT’s question assumes that the character of the government determines economic outcomes, then looks for evidence to fit. A rigorous assessment reverses that order. It starts with outcomes: inflation, reserves, growth, fiscal discipline, market access. It then asks what produced them. On every one of these measures, Pakistan’s trajectory since 2023 is positive.

Pakistan’s economic management is being judged by a label, not by results. No serious analysis of an economy discards a record of stabilisation, reform delivery and restored investor confidence because it dislikes the political vocabulary attached to the government. International financial journalism should hold itself to its own standard of evidence.

Stabilisation was the necessary first phase, and it has been achieved. The next phase is converting it into lasting prosperity: a broader tax base, more efficient public spending, stronger exports, productive investment and lower exposure to external shocks. Pakistan is entering that phase from a position of strength, with market access, a rebuilt reserve buffer and an investor base that has just shown it is willing to commit billions.

The country’s critics asked for stability. Pakistan delivered it. They should now judge what comes next by the same measurable benchmarks, and drop the headline that put a label before the evidence.

SAT Commentary

SAT Commentaries, a collection of insightful social media threads on current events and social issues, featuring diverse perspectives from various authors.