Pakistan at the Brink: Challenges, Choices, and the Crucial 2025–26 Budget”
As Pakistan prepares to present its federal budget for the fiscal year 2025–26 on June 10, the country finds itself at a defining moment. The upcoming budget is far more than a routine financial statement—it is a crucial roadmap that will determine whether Pakistan can stabilize its fragile economy or continue down a path of recurring crises. Against the backdrop of political turbulence, economic stress, and ongoing negotiations with the International Monetary Fund (IMF), this budget could set the tone for years to come.
Economic Outlook: Fragile Recovery in a Volatile Climate
Pakistan’s economy is showing cautious signs of stabilization. The GDP growth for FY2024–25 is projected at 2.68%, slightly below the government’s 3.6% target. This is a modest recovery, aided by declining inflation and interest rates. The State Bank of Pakistan has cut the policy rate to 11%, down from last year’s peak of 22%, signaling a shift toward growth stimulation.
Inflation, which had surged........

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