IMF flags corruption as major obstacle to Pakistan’s economic stability
According to the report, corruption weakens the control of state institutions and prevents the transparent and proper use of tax revenues, ultimately reducing overall tax collection. Public trust in the legal system is also severely damaged due to widespread corruption.
The IMF noted that corruption pushes state-owned enterprises toward losses, while overly complex and excessive regulations suffocate economic growth. Tax and customs officials are often unable to deliver performance according to their capacity, further exposing systemic weaknesses.
The institution added that excessive regulations and bureaucratic hurdles are hampering development across all sectors. Many matters end up in courts instead of being resolved administratively or through consultation. With an overwhelming number of pending cases, judicial delays have a direct negative impact on economic activity and the overall business environment.
The IMF report further emphasises that systemic reforms, enhanced transparency, and effective governance are essential for Pakistan’s economic recovery and long-term stability.