IMF warns Pakistan’s corruption “persistent and corrosive,” says Rs5.3 trillion recoveries just tip of iceberg

In a sharply critical assessment, the IMF has concluded that corruption in Pakistan remains “persistent and corrosive”, despite recoveries of approximately Rs5.3 trillion between January 2023 and December 2024, an amount which the IMF says represent only a fraction of the real cost to the economy.

According to the IMF, those recoveries reflect only the assets recovered by the National Accountability Bureau (NAB) and do not cover the broader losses inflicted by corruption, including diverted public funds, distorted markets and battered investor trust.

The IMF predicts that implementing complete governance reforms could lift Pakistan’s GDP by 5 % to 6.5 % over five years.

The report, part of Pakistan’s latest bailout programme with the IMF, notes that corruption is found at every level of government, from small-scale bribes to high-level policy tempering by economic elites. Examples include the 2019 sugar-exports case under the Imran Khan government, where sugar-mill owners with political connections influenced pricing and export policy to the disadvantage of domestic consumers.

Governance shortcomings that were noted, include weak budgeting and reporting, ambiguous public procurement systems, politicised appointments and judicial inefficiencies.

At the federal level, the IMF points to state-owned enterprises, complex tax systems, and disjoint accountability institutions as major sources of risk. The Fund also identified the judiciary as “one of the most corrupt state functions” according to public surveys, a factor dejecting contract enforcement and investor confidence.

The Ministry of Finance in Islamabad reportedly delayed publication of the full report, which was required to unlock a US$1.2 billion IMF loan corruption. Pakistan is now entering its 25th programme with the IMF since 1958, reflecting the country’s chronic balance-of-payments and governance challenges.

The IMF emphasizes that without serious institutional reforms, such as transparent judicial appointments, independent oversight of auditing bodies, central asset registries and procurement reform, the strain of corruption will continue to hamper growth and reform efforts.

The IMF expects the government to publish the full governance & corruption report and begin implementation of its policies to curb corruption with monitoring tied to future disbursements of the bailout funds.