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First time I'm seeing surplus in services thanks to IT growth. If not for the fact that oil import bill doubled in april, Pakistan would have posted another CA surplus of $1bn.

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The cost of being formal in Pakistan​


Formal sector and salaried class pay high taxes because they are visible, while undocumented and big fish remain comfo

Ahmed Mujtaba Memon
May 25, 2026

view of business offices and under construction residential apartments in karachi pakistan september 23 2025 photo reuters


View of business offices and under construction residential apartments in Karachi, Pakistan September 23, 2025 Photo: Reuters

ISLAMABAD: I run the kind of business Pakistan says it wants and needs. I produce goods, employ people, file my returns and try to operate formally. Yet the more formal and visible a business becomes, the more the government comes after it.

I am told that the IMF programme has stabilised the economy, the fiscal numbers are improving and Pakistan is making progress. But if that is so, why does it feel harder each month to stay afloat?

This is what it feels like to be in the formal economy of Pakistan. Most formal businesses are not asking for favours or subsidies; they want a stable environment in which they can do what they do best.

They want to pay the taxes they legally owe, but do not want arbitrary demands or delayed refunds to finance the state while they scramble for working capital at exorbitant interest rates. They want to grow and employ people, but higher fuel, transport and food costs quickly lead to wage pressure, higher input costs and declining profit margins.

The recent IMF report talks about fiscal discipline, primary surplus, reserve building, energy cost recovery and broadening the tax base. All these things are very important and Pakistan does need stability. But the question is who is paying for this stabilisation and whether the productive economy is being weakened in the process.
 
Pakistani politicians have been making big promises about the economy for years but look around. Are we actually better off today, or are we basically standing where we were back in 2010?

Right now, the trade deficit for this fiscal year is still massive, somewhere between $22.6 billion and $31.98 billion, depending on which reporting period you look at.

#ClaimPersonApprox Date / ContextSource TypeWhy Unrealistic
1JF‑17 exports will eliminate IMF needKhawaja Asif2019–2020TV interviewsJet exports too small vs. financing gap
2CPEC will end IMF dependencePML‑N leaders2015–2017Rallies, pressersCPEC is debt‑heavy
3Pakistan will be an Asian Tiger by 2025Imran Khan2018CampaignRequires decades of reforms
410 million jobs in 5 yearsImran Khan2018ManifestoNo industrial base to support it
55 million homes in 5 yearsImran Khan2018Housing launchFiscal + land constraints
6Rupee will return to 100 per dollarIshaq Dar2016–2022TV interviewsMarket fundamentals weak
7Pakistan will not defaultMultiple PMs/FMs2018–2024PressersReserves critically low
8Inflation will fall to single digitsFinance Ministers2021–2023Budget speechesStructural inflation drivers
9Budget surplus next yearFinance Ministers2010–2023BudgetsChronic deficits
10Pakistan will be a $1T economy soonVarious leaders2018–2023SpeechesRequires decades of 7–8% growth
11Debt will be reduced to zeroMultiple leaders2008–2023RalliesImpossible without surplus + reforms
128% GDP growth soonFinance Ministers2013–2023BudgetsNo export or investment base
13Global export powerhouseCommerce Ministers2013–2022Trade exposNarrow export basket
14Top textile exporterCommerce Ministers2014–2023Industry eventsEnergy + productivity issues
15Top agricultural exporterAgriculture Ministers2014–2023Kissan eventsLow yields + water crisis
16Top dairy exporterLivestock Ministers2014–2021Agriculture exposInformal sector + low quality
17Top mineral exporterPetroleum Ministers2013–2023Mining exposPoor regulation + security issues
18Regional manufacturing hubCommerce Ministers2013–2022Policy launchesWeak industrial base
19Global halal‑food hubCommerce Ministers2015–2022Trade exposNo certification ecosystem
20Global logistics corridorPlanning Ministers2015–2023CPEC briefingsInfrastructure gaps
21Regional trade hub like DubaiPMs/Commerce Ministers2013–2023Investment forumsGovernance + stability issues
22IT exports will reach $50BIT Ministers2020–2023Tech summitsCurrent exports ~ $2–3B
23Knowledge economy in few yearsPMs/IT Ministers2016–2023Digital PakistanRequires decades of R&D
24Crypto/blockchain global hubPTI IT Ministry2020–2022Tech eventsSBP restrictions
25Complete digital governanceIT Ministers2016–2023E‑gov launchesFragmented databases
26Global Islamic finance centerFinance Ministers2014–2023Banking summitsSmall capital markets
27Eliminate load‑shedding foreverPML‑N & PTI2013–2022RalliesCircular debt + losses
28Complete energy independencePMs/Energy Ministers2013–2022Project inaugurationsHeavy import dependence
29Self‑sufficient in oil & gasPetroleum Ministers2010–2023PressersLow reserves
30Gwadar will be next SingaporeMultiple governments2015–2023CPEC summitsGovernance + scale mismatch
31Eliminate povertyPMs2013–2023RalliesRequires sustained growth
32100% literacy soonEducation Ministers2008–2023Policy launchesMillions out of school
33Universal healthcare without more spendingPTI govt2019–2022Health card launchBudget too small
34Full employmentMultiple leaders2008–2023RalliesWeak job creation
35Tourism superpowerImran Khan2018–2021Tourism eventsInfrastructure + security gaps
 
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