KARACHI: Pakistan’s Finance Minister Muhammad Aurangzeb on Sunday described a recent International Monetary Fund (IMF) report on corruption and governance weaknesses as a “catalyst” for long-overdue reforms, saying the findings would help the government strengthen oversight, plug leakages and improve transparency in the South Asian country.
The IMF this month pointed out weaknesses in Pakistani institutions and urged prioritizing a 15-point set of recommendations to address issues tied to a heightened risk of corruption. The recommendations focus on private sector development, public sector performance and accountability.
The directions published in the IMF’s Governance and Corruption Diagnostic Assessment (GCDA) estimate that implementing the recommended reforms could raise Pakistan’s gross domestic product (GDP) by 5–6.5 percent over the next five years.
The report, published by Pakistan’s finance ministry, followed an IMF team’s visit to Pakistan last month to help local authorities address budget discrepancies amounting to the tune of Rs448 million ($1.58 million).
“The report’s findings should be viewed within the context of Pakistan’s long-standing structural challenges, some dating back decades, and that the government is determined to advance the remaining recommendations,” Aurangzeb was quoted as saying by his ministry.
“Structural reforms without institutional strengthening would remain incomplete... the government considers the report a catalyst for accelerating reforms rather than a criticism of current policy direction.”
Pakistan has been working closely with the IMF on economic reforms. In September 2024, the South Asian nation secured a $7 billion bailout from the international lender after months of negotiations, aiming to stabilize its struggling economy. It was followed by a $1.4 billion, 28-month Resilience and Sustainability Facility in May.
The IMF’s executive board is scheduled to meet on Dec. 8 to review Pakistan’s performance under the extended fund and resilience and sustainability loan facilities. A successful review would see the release of $1.2 billion tranche for Pakistan.
“While corruption vulnerabilities are present at all levels of government, the most economically damaging manifestations involve privileged entities that exert influence over key economic sectors including those owned by or affiliated with the state,” the global lender said in its report this month.
Aurangzeb clarified that the government had itself requested and fully facilitated the assessment as part of its commitment to transparency and reform.
“The report acknowledged meaningful progress in key areas particularly taxation, governance, public financial management, and procurement,” he said, highlighting that many of the priority reforms identified by the IMF are already underway.
He shared that the government’s medium-term economic vision rests on moving from stabilization to durable, broad-based and inclusive growth led by exports, remittances, productivity and private investment.
“From July to October, cement production rose by 16 percent, fertilizer by 9 percent, petroleum by 4 percent, automobiles by 31 percent, and mobile phone manufacturing by 26 percent,” the minister said. “Large-scale manufacturing grew by 4.1 percent year-on-year in the first quarter, reflecting a positive shift compared to the contraction recorded last year.”
He emphasized the challenge ahead was to sustain this trajectory while ensuring that Pakistan does not return to the boom-and-bust cycles driven by external sector pressures.
