April 16, 2014

Macroeconomic Stability of Pakistan: The Role of the IMF and World Bank (1997–2003)

Last updated: July 30, 2008


Faisal Cheema
Cantonment Executive Officer, Rawalpindi Cantonment Board
Civil Services of Pakistan

ACDIS Occasional Paper series
May 2004

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As of 2004, Pakistan’s economy had reached a stage where it enjoyed self-sufficiency in food, an unprecedented stock of foreign exchange reserves, declining budget deficits, increasing industrial production, and was approaching an overall growth of over 5 percent per annum. The economy had achieved fundamental macroeconomic stability amid general improvement in economic indicators. On the other hand, Pakistan was still faced with challenges like boosting investment, eliminating public sector deficits, creating new infrastructure, and expanding social sector development. The tasks of poverty alleviation and employment generation remained formidable, requiring both direct and indirect initiatives. While macroeconomic stability had been achieved, the economy was still at the take-off stage, with much room for improvement.

This paper offers an examination of Pakistan's macroeconomic indicators, its relationship to the IMF, and the future prospects of Pakistan's economy. The piece is divided into several sections. Part One deals with selected macroeconomic indicators of the economy and their performance in the selected period. Part Two discusses the role of the IMF and World Bank in the economic revival of Pakistan. In Part Three, an attempt is made to draw a future horizon of the country. In the last section, the author presents conclusions.