Pakistan’s Economic Challenges and Recovery in 2023

Summary of the Article:
In 2023, Pakistan faced a challenging macroeconomic environment characterized by rising inflation, weak foreign exchange inflows, pressures on its external account and local currency, and low business confidence, particularly in the first half of the year, according to the State Bank of Pakistan (SBP). However, policy measures, regulatory interventions, and a nine-month stand-by agreement with the International Monetary Fund (IMF) helped stabilize the situation in the latter half of the year. These efforts resulted in reduced inflation, economic growth recovery, and a stabilized exchange rate by year-end. The financial sector demonstrated strong growth and resilience, with its asset base expanding by 27%, primarily driven by the banking sector.