Official CSS Syllabus Item: Pakistan's Domestic Affairs → Economic — 20 Marks (shared with Political & Social)

Answer Structure

1. Context/background 2. Current situation (facts, dates, figures) 3. Key challenges 4. Government response/policy 5. Way forward

Background

• 2023 balance-of-payments crisis: excessive external borrowing, poor governance, fuel/commodity price rises (Russia-Ukraine war), 2022 floods (~$30bn damage), political instability
• IMF stabilization: $3bn loan (July 2023), $7bn second bailout (Sept 2024)

Key Indicators (2026 — verify closer to exam)

• Fiscal deficit: 22-year low of 2.6% of GDP (FY2025-26)
• GDP growth: ~3.1% (2025) → ~3.7% (2026 projected)
• Inflation (CPI): ~3% (2026), down from double digits
• GDP (nominal): $452.1bn; rank ~40th globally
• Poverty: 44.7% below poverty line, 16.4% extreme poverty — major unresolved concern
• Government debt: 83.6% of GDP — still very high
• Credit ratings: improving but low (S&P CCC+, Moody's Caa2 positive outlook, Fitch B−)

Reforms & Positive Developments

• First fiscal surplus in 2+ decades (end 2024)
• PIA privatization — positive development; other loss-making SOEs still pending
• Exports had strong start FY2026-27

Structural Challenges (KEY for essay)