Year of stabilisation

The year 2024 ended more or less the same way it began, with Pakistan struggling to stay on course to stabilise its economy from the debilitating instability of the previous three years. The spectre of default retreated, inflation subsided after a ferocious three-year run starting from May 2021, the exchange rate found its moorings and the country went from one IMF programme to another with barely a four-month interval in between. The groundwork for all this began in July 2023 as the curtain dropped on what was arguably the single most troubled parliament ever in Pakistan’s history. The interim government that took the country’s reins in July 2023 began implementing a tough but manageable Standby Arrangement (SBA) negotiated hastily by the outgoing PDM government in its final days. At the start of 2024 the interim government was holding the course in the stabilisation programme it was assigned to implement. One of the key targets was to achieve a primary surplus equal to 0.4 per cent of GDP by the end of FY24 from a deficit of 1pc of GDP. But in the first six months of the fiscal year, running from July to December 2023, the interim government managed to post a surplus equal to 1.7pc of GDP, surpassing its annual target in six months.