All eyes on budget as Pakistan walks tightrope of recovery

With the federal budget due in less than two weeks, Kamran Khan says Pakistan’s economy is showing signs of stabilization for the first time in years—but warns that the coming budget must walk a tightrope between maintaining momentum and meeting International Monetary Fund (IMF) demands.

In his vlog, Khan described the upcoming budget as “crucial” for the country’s economic trajectory. He noted that several key indicators are improving, including inflation, interest rates, and remittances, giving hope to businesses and ordinary citizens alike.

“This is a budget that the entire nation is waiting for, but even more so the economy and the business community,” Khan said. “The good news is that Pakistan’s economy is finally showing signs of recovery.”

He pointed to a record decline in inflation and a sharp cut in interest rates, which now stand at 11 percent—nearly half of what they were last year. The exchange rate has remained stable for 18 consecutive months, and foreign reserves have improved, he added.

Khan also highlighted a 31 percent increase in remittances and a rise in per capita income as signs of economic improvement. “These indicators confirm that the economy is heading in the right direction,” he said.

But the optimism comes with a warning. Khan said that despite these gains, the IMF remains reluctant to allow Pakistan to present a growth-oriented budget. He called this reluctance “worrisome,” especially as the country’s GDP has shown signs of contraction.

“If GDP continues to shrink, job creation and broader economic expansion will be difficult,” he said. “This is a tightrope budget.”

Khan credited some recent improvements—especially in electricity prices and crisis management in the power sector—to cooperation with the International Finance Corporation (IFC). These steps, he said, have created a more favorable environment for economic growth.

However, he stressed that the current budget, to be presented by Finance Minister Muhammad Aurangzeb, comes after two years of economic crises. “This is not just any budget. This is Muhammad Aurangzeb’s budget,” Khan said. “He understands Pakistan’s economy and knows what needs to be done.”

With expectations running high, Khan said this year’s budget must address the needs of businesses, salaried workers, and everyday citizens alike. “It’s a moment of great anticipation—and great responsibility,” he said.

The federal budget is expected to be unveiled in early June.