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Pakistan has spent three years swallowing bitter medicine, but this budget is the first to taste different.
GDP growth of 3.7 per cent, achieved despite flood losses and the shockwaves of an Iran-US war that threatened to derail the entire region, won’t make headlines on its own. But context matters, and the context here is extraordinary. Inflation has gone down from 22pc to 11.5pc, heading toward 7-7.5pc by the end of the year. Reserves have moved from $4 billion to $17bn. The fiscal deficit has nearly halved, from 7.8pc to 4pc. Moody’s, Fitch, and S&P have all upgraded us. Pakistan returned to international bond markets after four years, and the Euro Bond was oversubscribed.
Credit where it’s due: navigating one of the most dangerous geopolitical environments in a generation, without derailing the stabilisation programme, is no small achievement. Many economies would have used regional turmoil as an excuse to abandon discipline, but this government didn’t.
However, macro stability doesn’t pay anyone’s grocery bill. The real test of FY27 is whether discipline at the top converts into relief at the bottom, for the salaried class, exporters, retail, and industry.
