Deputy Prime Minister and Foreign Minister Senator Mohammad Ishaq Dar on Wednesday acknowledged that Pakistan’s ongoing IMF programme is widely viewed as “anti-growth”, warning that an annual economic expansion of roughly 2.6 percent effectively translates into zero or even negative growth once population dynamics are taken into account.

Speaking at the closing session of the Pakistan Policy Dialogue 2026, organised by the Policy Research & Advisory Council in partnership with the Corporate Pakistan Group, Dar said Pakistan needs growth above the 2.6 percent threshold to generate real economic gains. He noted that the country previously required three years to push growth above 6 percent in 2017 but argued that conditions now exist to rebuild momentum.

Dar reiterated that geo-economics remains central to the government’s foreign policy, with a focus on enhancing economic engagement to unlock opportunities for Pakistani businesses. He highlighted progress under CPEC Phase II and deepening ties with the United States, Europe, Gulf nations, Central Asia, as well as emerging outreach in East Asia and Africa.

He said Pakistan continues to grapple with a sizeable external financing gap. “The economy faces a USD 30 billion twin-deficit challenge,” he stated. “This can be bridged through targeted increases of USD 10 billion each in remittances, exports, and services.”

The deputy prime minister stressed that sustainable economic recovery depends on strong governance, policy continuity, and institutional reform. He pointed to ongoing measures—including SOE privatisation, efforts to curtail circular debt, administrative restructuring, and digital governance—as evidence of reform traction. These steps, he said, are reflected in a current account surplus, moderating inflation, stronger revenue collection, and improving investor sentiment.

Dar emphasised that political neutrality in economic policy is essential to maintain progress. “For economic revival, difficult decisions were taken by setting aside political considerations,” he said, adding that the government’s clear economic roadmap is now moving toward implementation. He cited the long-delayed privatisation of PIA as a milestone that would ultimately reduce fiscal strain and improve service delivery.

Reflecting on the country’s economic trajectory, Dar said Pakistan was among the world’s major emerging economies in 2017 but had deteriorated sharply by 2022. “I was called in to avert default, and we stabilized the economy,” he remarked.

He also noted continued diplomatic and economic engagements, including negotiations on a 19 percent tariff deal with the United States, ongoing discussions with the European Union on the continuation of GSP+, and a recently signed defence agreement with Saudi Arabia.

Dar added that Pakistan’s regional relationships are entering a new phase, with improved engagement with Bangladesh and emerging trilateral dialogues involving Pakistan, China, Bangladesh, and separately Pakistan, China, and Afghanistan.