Nearly 45 per cent of Pakistan’s population is currently living in poverty amid major governance and institutional crisis that continues to undermine its economic potential.
The economic crisis situation in Pakistan is not merely a result of the IMF programmes or economic policy setbacks. It rather stems from a broader leadership deficit and weakening institutions, IANS reported quoting an article from The Dawn.
The Pakistani leading daily’s report highlights that the country’s government has repeatedly entered IMF-supported programmes that have provided temporary macroeconomic stability to its economy, but failed to address the underlying economic weaknesses.
It further points towards a massive decline in financial support for businesses and highlighted that Pakistan’s private sector credit-to-GDP ratio has come down drastically from 27 per cent in 2008 to a mere 8.7 per cent in 2025. This is said to be among the lowest levels across all emerging economies. Also, Small and medium enterprises (SMEs) lending has come down from about 17 per cent in the mid-2000s to just 6 per cent.
Moreover, exports are now at 10 per cent of GDP – down from 17 per cent two decades ago.
The report also highlights that patronage networks and political interference have weakened the civil service and public institutions in the country. This not only discourages merit-based decision-making, but also reduce administrative efficiency.
On Pakistan’s judicial system, the report states that there are over two million pending cases in district courts and more than 1,100 vacant judicial positions.