Pakistan Political Economy 2025

What the Pakistani political economy looks like in 2025

The Situation

The Pakistani political economy in 2025 reflects the specific combination of the IMF programme that has stabilised the balance of payments crisis, the political situation following the 2024 election and the specific relationship between the elected government and the military establishment, and the structural economic challenges that neither the IMF programme nor the political normalisation has addressed. The stabilisation is real. The structural challenges remain.

The Structural Challenges

The structural challenges: the energy sector circular debt that has accumulated to approximately 2.5 trillion rupees; the tax base whose narrowness relative to the expenditure requirements produces the chronic fiscal deficit; and the export concentration in textile products whose value-added dimension is lower than the comparable exports of regional competitors. Each challenge predates the current government and will survive it without the specific structural reforms that the political economy of Pakistan has historically resisted.

Daily Asian News Coverage

Daily Asian News covers Pakistani political economy because the accountability journalism of one of the most strategically significant countries in South Asia requires the sustained coverage of the specific economic and political dynamics that determine whether Pakistan can achieve the stability that its strategic position requires.

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