Pakistan has developed an unusual economic model: governments come and go, creditors stay and the debts grow larger. According to the World Bank's International Debt Report 2026, the country's external debt rose from $68.7 billion in 2015 to $135.1 billion in 2025.
China remains its largest individual creditor, followed by the World Bank and Asian Development Bank (ADB). Meanwhile, public liabilities, including domestic borrowing, have crossed the psychologically alarming threshold of Rs100 trillion.
These numbers tell only half the story. The other half concerns a political system that has repeatedly prevented elected governments from completing their work, while allowing institutions without electoral mandates to exercise considerable influence over economic decision-making.
Over the past decade, Pakistan has experienced political disqualifications, disputed elections, mass protests, parliamentary confrontations, judicial interventions, arrests of political leaders and repeated confrontations between civilian authorities, the military, and the judiciary. These disruptions were not the sole causes of economic decline.
Fiscal indiscipline, poor taxation, uncompetitive exports, energy-sector inefficiencies and external shocks contributed enormously. But political instability made almost every economic weakness harder to remedy.
Consider the procession of prime ministers since 2015: Nawaz Sharif (2013-17), Shahid Khaqan Abbasi (2017-18), caretaker Nasir-ul-Mulk (2018), Imran Khan (2018-22), Shehbaz Sharif (2022-23), caretaker Anwaar-ul-Haq Kakar (2023-24) and Shehbaz Sharif again since March 2024. Seven premierships, held by six individuals, have presided over a country apparently incapable of maintaining a stable economic direction.
The first great rupture came in 2017. Nawaz Sharif, whose government had overseen substantial infrastructure development and the launch of the China-Pakistan Economic Corridor (CPEC), was disqualified by the Supreme Court following the Panama Papers controversy.
Accountability was a legitimate concern, but removing a prime minister halfway through an economic programme carried institutional and economic costs. The Pakistan Muslim League-Nawaz (PML-N) government had itself made serious mistakes; its management of the exchange rate discouraged exports, while infrastructure investment was not matched by productivity improvements.
Nevertheless, the political upheaval weakened policy continuity. The Faizabad protests later that year, and the military's controversial mediation of the dispute, further demonstrated how readily civilian authority could be undermined.
The 2018 election brought Imran Khan to power amid widespread allegations of establishment involvement in political engineering. Khan promised a transformed economy, an end to corruption and greater national self-reliance.
Instead, his government struggled with fiscal imbalances, shifting economic priorities and personnel changes. His first finance minister, Asad Umar, was replaced by Abdul Hafeez Shaikh, followed by a brief appointment of Hammad Azhar and then Shaukat Tarin.
The frequent reshuffling reflected a deeper problem: economic strategy remained vulnerable to political expediency. The government obtained an International Monetary Fund (IMF) programme in 2019, struggled with its conditions and then faced the Covid-19 pandemic.
Khan's administration also deserves credit for its pandemic-era social protection measures and some improvements in managing the external account. But his reluctance to address structural weaknesses meant that he mistook temporary recovery for sustainable reform.
Then came the 2022 turning point, when Khan faced a vote of no-confidence following deteriorating relations with the military leadership and the departure of coalition partners.