Despite a series of challenges and backlashes, Pakistan’s economy was operating progressively on a higher inclusive and sustainable growth path as a result of various measures and achievements. Pakistan was executing a stabilisation policy following the crisis of 2017-18 and the economy was patching up from macro-economic imbalances in fiscal year 2020-21 after the former prime minister’s party came in the government. COVID-19 slowed down the pace of the process which was recovered initially but the advent of 2nd and 3rd wave brought significant challenges which were met by the timely sagacious policies. Pandemics like COVID-19 are once-in-a-century events that devastate global economies. Pakistan did much better in coping up with the pandemic compared to many countries. And the federal government implemented various policies to ensure the wellbeing of the people and save the country from a crisis no one had ever thought of, Economy had witnessed a V–shaped recovery. The recovery of the economic system had been achieved without trading off the internal and external stability of the country. SBP’s foreign exchange reserves rose to $16 billion, four-years high. Keeping in view the significant performance pertaining to FATF conditions, potential of exports and e-commerce also rose to a greater extent. FBR tax collection had witnessed a significant growth of around 18 percent during July-May FY2021 owing to the revival of domestic economic activity and ongoing comprehensive tax policy and administrative reforms. Primary balance remained in surplus at 1.0 percent of GDP, highest level through the first three quarters in 12 years. On 27th May 2021, PSX witnessed an all-time high daily trading volume with 2.21 billion shares traded in a single session. Due to its impressive growth, Pakistan Stock Exchange earned the title of being the best Asian stock market and fourth best-performing market across the world in 2020. Under Ehsaas Emergency Cash Programme, Rs179.3 billion had been disbursed. Approximately 14.8 million families have benefited from the programme. World Bank recognises Ehsaas Emergency Cash among top 4 social protection interventions globally in terms of number of people covered. Under Kamyab Jawan Youth Entrepreneurship Scheme, Rs8,566 million had been disbursed till April, 2021 to the youth for various businesses. The 10 billion Tree Tsunami programme had achieved plantation of approximately 350 million plants during July-March FY2021 and about 100,000 daily wagers had been employed till March, 2021. Cumulatively, over 800 million plants have been regenerated/ planted in the last two years. IMF has acknowledged that the government policies had been critical in supporting the economy and saving lives and livelihoods. The IMF and Pakistan had announced the resumption of a stalled $6 billion loan programme. During the year, all three major credit rating agencies, Moody’s, Fitch and Standard & Poor’s, reaffirmed their sovereign credit ratings for Pakistan. This reaffirmation reflected the sound policies of the government and the confidence reposed by these leading international institutions in the country’s economic outlook. All due to the efforts and the visionary leadership of Imran Khan until he was ousted from the government through a no-confidence motion in the National Assembly of the country in which the united opposition under the PDM which is the Pakistan Democratic Movement. After which Muhammad Shehbaz Sharif took charge as the Prime Minister of Pakistan who earlier was the Opposition Leader of the country, within the 7 months of this new government the economy of the country has taken a nose-dive. Pakistan’s economy is expected to progress by only 2 percent in the current economic term concluding in June 2023. According to the World Bank’s October 2022 Pakistan Development Update: Inflation and the Poor, the slower growth will reflect damages and disruptions caused by catastrophic floods, a tight monetary stance, high inflation, and a less conducive global environment. Recovery will be gradual, with real GDP growth projected to reach 3.2 percent in fiscal year 2024. Poverty in the hardest-hit regions will likely worsen in the context of the recent flooding. Preliminary estimates suggest that without decisive relief and recovery efforts to help the poor the national poverty rate may increase by 2.5 to 4 percentage points, pushing between 5.8 and 9 million people into poverty. Macro-economic risks also remain high as Pakistan faces challenges associated with a large current account deficit, high public debt, and lower demand from its traditional export markets amid subdued global growth. The country’s overall default risk has surged to a higher extent and all economic indicators have also turned negative. Economists are stressing on the need for political stability in order to gain economic stability as such a crisis hit economy can be a threat to the national security of the country as well. The extent to which the political players of the country are going to compromise for the sake of the country’s drowning economy and provide a lethal support to it is yet to be determined and will be more clear with the passage of time provided that the country is going through a severe political battle between the former premier and the acting government. Pakistan’s economic growth rate experienced a significant decline, dropping to 0.3 percent in the outgoing fiscal year. This decline was primarily a result of imposing strict import restrictions to avoid a sovereign default, which had severe repercussions on the industrial sector, causing negative spillover effects on the services sector. The growth rate of 0.29 percent marks the lowest increase in the national output over the past four years, indicating mismanagement of the economy that has fallen short of meeting the needs of the country’s population of 250 million. Despite facing severe floods, the agricultural sector managed to achieve 1.6 percent growth, surpassing expectations of contraction due to the devastating impact on crops. However, the industrial sector contracted by 2.94 percent, and the services sector, being the largest in the economy, only showed marginal growth of 0.9 percent. The government failed to meet its targets across all sectors, with economic mismanagement leading to extensive layoffs and contributing to a record-high inflation rate of 36.4 percent. The provisional Gross Domestic Product (GDP) growth rate for the fiscal year 2022-23, ending on June 30, was estimated at 0.29 percent after a controversial meeting of the National Accounts Committee chaired by Planning Secretary Zafar Ali Shah. The government’s devaluation of the rupee and increased utility prices in hopes of securing a deal with the International Monetary Fund (IMF) resulted in heavy losses to the economy, without achieving the desired outcome. The nearly 0.3 percent growth rate falls far below the official target of 5 percent and aligns with the estimates of various institutions, including the Ministry of Finance, the State Bank of Pakistan, the IMF, the World Bank, and the Asian Development Bank, all of which predicted economic growth between 0.2 percent and 0.8 percent. While the figures are provisional and subject to change once final results are available, it is evident that the economic output suffered a broad-based slump, largely attributed to government mismanagement and the adverse effects of the floods. The previous year’s growth rate under the PTI rule was 6 percent, which was adjusted upward to 6.1 percent by the NAC. However, economist Dr Hafiz Pasha estimates a contraction of over 3 percent during the outgoing fiscal year. The import and consumption restrictions significantly impacted economic growth and triggered an external sector crisis, similar to the situation in 2018 when the country turned to the IMF. During the years 2017-2018 and 2021-2022, Pakistan’s growth heavily relied on foreign savings, which is considered unsustainable. The agriculture sector, targeted to achieve 3.9 percent growth, provisionally recorded 1.6 percent growth, which may have been influenced by the inclusion of flood expenses. Despite the challenges faced by the agricultural sector, the chief statistician of PBS, Dr Naeem ul Haq, attributed its growth to better wheat and sugarcane crops. The industrial sector’s contraction of 2.94 percent was far from the target of 7.4 percent growth, partly due to import restrictions causing raw material shortages and factory closures. The services sector, with a target of 4 percent growth, only managed a marginal rate of 0.9 percent, significantly lower than the previous year’s expansion of 6.6 percent, as reported by the NAC. The NAC also revised the economic growth rate for the second last year of the PTI government from 6 percent to 6.1 percent, while the final GDP growth rate for the year 2020-21 was revised to 5.8 percent. The current government, however, in its last few days of office, has managed to secure a deal with the International Monetary Fund (IMF) which is a standby agreement of $3 billion. As a result of which external pressure has been added on the local public in terms of rise in the price of electricity units etc. It is pertinent to note that economic stability can only be a result of political stability in any democratic model.