PAKISTAN has done what the International Monetary Fund asked. It has raised electricity tariffs, cut subsidies, tightened monetary policy, and let the rupee find its level. Inflation has fallen from its 2023 peak of nearly 40% to approximately 10% today. Reserves have stabilised. The current account has swung into surplus. GDP grew 3.7% in FY2026, the highest in four years. By every measure that appears in a quarterly review, the country is recovering. Tell that to the father in Rawalpindi who now spends a third of his daily wage filling his motorcycle. Tell it to the mother in Peshawar deciding between buying flour and buying medicine. Tell it to the small shopkeeper in Karachi who has stopped using his refrigerator because the electricity bill costs more than the goods inside it. For most Pakistanis, the recovery is something that happens in press conferences.

This is the stabilisation trap, and Pakistan is caught inside it with no visible exit. The government has mistaken balance-of-payments management for an economic strategy. It has treated the absence of crisis as the presence of progress. And it has allowed a set of policies designed to avert default to harden into a system that sustains poverty rather than reducing it. Pakistan’s Economic Survey 2026-27, published in June, confirmed what every household already knew, that the national poverty rate has risen to 28.9%, up from 21.9% in 2018-19, pushing approximately 27 million additional Pakistanis into financial distress over six years. Rural poverty now stands at........

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