The Country Everyone Gave Up on Is Fighting Back

Every nation faces a moment when confidence in its economic future is tested. What matters is how it answers. In May 2023, Pakistan’s inflation hit a shocking 38 percent. Reserves were thin, bills were piling up, and at that time, concerns about Pakistanu2019s ability to meet its external obligations had intensified, with default fears dominating economic debate. Now fast forward to this week. In New York, the head of the International Monetary Fund sat across from Prime Minister Shehbaz Sharif and praised Pakistan’s progress. What happened in between is one of the most underrated comeback stories in the world.

A Big Vote of Confidence

IMF chief Kristalina Georgieva said that strong reform implementation has helped preserve stability, restore confidence and bring back access to global markets. Coming from the head of the world’s most watched lender, that is not small praise. And it is not just polite talk. Pakistan raised $750 million through a Eurobond in April 2026 and $250 million through a Panda bond in May 2026. When international investors lend to you again, trust is truly returning.

The Numbers Tell the Story

Start with reserves. The State Bank’s reserves reached $18.4 billion by June 2026, up from $13 billion a year earlier, even after Pakistan repaid $8 billion in debt in June alone. The budget is healthier too. The IMF expects a primary surplus of 1.6 percent of GDP, which means the government is collecting more than it spends before paying interest. For a country that once lived from one loan to the next, that is a big change. The current account deficit also stayed close to the lower end of its 0 to 1 percent of GDP range. The decline in the interest burden has also created greater fiscal space for the government.

The economy is moving forward as well. Despite the summer floods, GDP growth averaged 3.8 percent in the first half of FY26, led by cars, construction and garments. Overseas Pakistanis showed their love for the homeland too, sending home $38.1 billion in just eleven months, up 9.2 percent. The full year is expected to pass $41.5 billion. The increase in remittances provided another important source of foreign exchange and external support.

The World Is Noticing

Global agencies are taking note. Moody’s upgraded Pakistan’s credit rating to B3 from Caa1 with a stable outlook, and interest payments fell to roughly 35 percent of government revenue in FY26, down from 49 percent the year before. In simple words, Pakistan now spends less of every rupee it earns on old debts. Local investors agree. The KSE-100 gained around 44 percent in FY26, beating gold, treasury bills and the dollar.

Tested by Storms, Still Standing

None of this came easy. Pakistan faced heavy floods, also faced the economic effects of the war in the Middle East and a sharp rise in global energy prices. The floods alone displaced roughly three million people. Inflation rose to 7.3 percent in March as fuel costs reached domestic bills. Yet the FY26 average came in at about 7.05 percent, a long way from the 38 percent peak of 2023. This time, the economy bent but did not break. That is real stability: not a life without storms, but the strength to survive them.

From Stability to Growth

Now comes the most important part. Stability is the foundation, not the house. Pakistan’s young people are already building it. Technology exports hit a record $4.6 billion in FY26, up 21 percent, with freelancers contributing about a quarter of the earnings. More than half of Pakistanis are under 30, and that is an advantage money cannot buy. To make the most of it, the National Tariff Regime aims to lower high import duties so our factories can compete globally. A wider tax base can reduce borrowing, and privatization can free taxpayers from loss-making state companies.

The Road Ahead

The IMF programme, approved in September 2024, runs for 37 months and is on track, according to the Fund. But it is not the destination. The real goal is a Pakistan that no longer needs it. Citizens have a role too; paying taxes, backing local products and learning new skills. That is how a graduate in Lahore lands a good job and a farmer in Sindh gets a fair price. Pakistanis deserve to be proud of how far the country has come. Pakistan has proved it can survive. Now it is time to show the world that it can thrive.