Pakistan Economic Crisis: Shehbaz Sharif Admits Friends Don’t Want to Help Anymore

Pakistan Economic Crisis: Pakistan continues to sink deeper into its economic crisis, and the latest evidence of this is Prime Minister Shehbaz Sharif’s recent statement. He openly admitted that even Pakistan’s closest allies—China, Saudi Arabia, Turkey, Qatar, and the UAE—no longer want the country to approach them repeatedly with a “begging bowl.” This confession was made during an address to senior officials of the Pakistani military, where he expressed serious concerns about the country’s fragile economy, rising debt, and the shifting attitude of the international community.

Pakistan Economic Crisis:

In his address, Shehbaz Sharif clearly stated that Pakistan’s traditional allies now expect it to engage in partnerships focused on trade, investment, technology, education, and healthcare, rather than seeking financial aid. He said:

“Our friends no longer want us to approach them with a begging bowl. They want us to become partners in trade and development.”

This statement highlights the gravity of the Pakistan economic crisis. China, which has invested billions in Pakistan under the Belt and Road Initiative (BRI), is now imposing stricter conditions for debt repayment. Saudi Arabia and the UAE, which previously provided oil and cash aid, are now pushing for investment-driven cooperation. This shift reflects the severe blow that the Pakistan economic crisis has dealt to the country’s global reputation.

A Warning to the Military:

Addressing top military officials, Shehbaz Sharif said that the Pakistan economic crisis has become so deep that it can no longer be resolved solely by the government or the military. Referring to Army Chief General Asim Munir, he said:

“Field Marshal Munir and I can no longer carry this burden alone. This responsibility now lies with the entire nation.”

This remark not only underscores the seriousness of the Pakistan economic crisis but also signals that the military—which has historically played a significant role in the country’s politics and economy—is now struggling to cope with the crisis. The statement comes amid rising India-Pakistan tensions and recent skirmishes along the Line of Control (LoC), which have further complicated Pakistan’s situation.

Economic Distress Already Exposed

This is not the first time Shehbaz Sharif has expressed concern over the Pakistan economic crisis. In March 2023, he stated in the National Assembly that the International Monetary Fund (IMF) was imposing harsh conditions at every step and that the country was on the verge of default. Former Prime Minister Imran Khan had also criticised the Shehbaz government, claiming it was pleading for talks with India but failing to address the Pakistan economic crisis. The ongoing political instability and blame game have only worsened the economic situation.

IMF Loan:

In May 2025, to tackle the Pakistan economic crisis, the IMF disbursed a new tranche of $1.3 billion as part of a $7 billion bailout package. So far, Pakistan has received $2.3 billion under this package. However, the latest tranche came with 11 new conditions, including:

• Budget transparency: Getting the 2026 fiscal budget approved by parliament by June 2025.
• Electricity surcharge: Raising electricity tariffs to increase revenue.
• Import relaxation: Lifting restrictions on the import of used vehicles.

India has opposed the IMF loan, expressing concern that Pakistan may misuse the funds to support terrorism despite its ongoing economic crisis. India abstained from voting in the IMF review meeting and warned that Pakistan has a history of violating IMF conditions. While Shehbaz Sharif dismissed this as an “Indian pressure tactic,” experts believe the new conditions could worsen the Pakistan economic crisis.

Key Causes of the Pakistan Economic Crisis

Several factors have led to the current Pakistan economic crisis, making it a complex and long-term challenge:

1. Rising foreign debt: By June 2025, Pakistan’s foreign debt reached $125 billion—42% of its GDP—making repayments increasingly burdensome.
2. Currency depreciation: In 2017, the exchange rate was 100 PKR to 1 USD; it now stands at 330 PKR to 1 USD, making imports costlier and intensifying the Pakistan economic crisis.
3. Soaring inflation: Inflation has crossed 37%, with food, fuel, and essential goods becoming unaffordable for the public.
4. Political instability: The arrest of Imran Khan and frequent government changes have eroded investor confidence, leading to a steep drop in foreign investment.
5. Foreign reserves shortage: Pakistan’s foreign currency reserves have dwindled to just $9.5 billion, barely enough to cover two months of imports.

India-Pakistan Tensions and Their Impact

The Pakistan economic crisis is not limited to the economic domain. Recent India-Pakistan skirmishes along the LoC have further strained the situation. In May 2025, Shehbaz Sharif proposed talks with Iran’s President regarding Kashmir, terrorism, and the Indus Waters Treaty, but India rejected the offer, asserting that “terrorism and talks cannot go together.”

According to Pakistani intelligence reports, terrorist groups like Jaish-e-Mohammed are once again becoming active in Pakistan-occupied Kashmir (PoK), raising red flags for India. This development further weakens Pakistan’s geopolitical standing amid its ongoing economic crisis.

What’s the Way Forward?

To recover from the Pakistan economic crisis, the country must take concrete steps:

1. Economic reforms: Ensure transparency in the tax system, curb corruption, and reduce government expenditures.
2. Encourage investment: Achieve political stability and adopt clear policies to regain investor confidence.
3. Self-reliance: Reduce dependency on imports and promote local industries to boost exports.
4. Crackdown on terrorism: Take decisive action against terrorist organisations to regain international trust.

Also Read

• India-Russia Strategic Partnership: Russia Rejects Pakistani Disinformation on $2.6 Billion Deal