The United States and Pakistan have a strong economic and commercial relationship, with two-way trade totaling approximately $7.23 billion in 2024. The United States is one of Pakistan’s largest trading partners and a leading source of foreign direct investment. Goods exported from the United States to Pakistan reached $2.11 billion in 2024, up 3.4 percent from 2023. The United States also remained Pakistan’s largest goods export market in 2024 at $5.12 billion, a 4.8 percent increase from 2023. 

Pakistan has maintained a long and complex relationship with the International Monetary Fund (IMF), participating in 24 programs since 1958. These arrangements have typically sought to stabilize the country’s economy during periods of balance of payments crises, declining foreign reserves, and/or mounting fiscal deficits. The most recent IMF program, which was approved in July 2023 and ended in April 2024 and was viewed as largely successful providing short term stability to the economy, was a $3 billion Stand-By Arrangement (SBA) which supported macroeconomic stability, rebuilt the country’s foreign exchange reserves, and fostered structural reforms. In September 2024, the IMF approved a 37-month, $7 billion Extended Fund Facility (EFF) to address deeper structural challenges such as tax reform, energy sector losses, inflation control, and state-owned enterprise (SOE) reform. The EFF program has helped improve Pakistan’s balance of payments while curbing inflation and stabilizing interest rates. 

American firms have a strong presence in Pakistan across a range of sectors, including fast-moving consumer goods, chemicals, agriculture, financial services, franchising, information and communication technology, renewable energy, and health care services. More than 60 wholly or majority-owned U.S. subsidiary firms are currently registered with the American Business Council (ABC) of Pakistan and the American Business Forum (ABF). The U.S.-Pakistan Business Council, an affiliate of the U.S. Chamber of Commerce based in Washington D.C., serves as another forum for U.S. companies with business and investment interests in Pakistan. Leading U.S. companies doing business in the country include Abbott Laboratories, Cargill, Coca-Cola, Citibank, DuPont, General Electric Vernova, Honeywell, IBM, JP Morgan, Mastercard, Mondelez, PepsiCo, and Visa. 

The U.S. corporate members of the ABC and ABF play an influential role in Pakistan’s economy by upholding global standards of corporate governance. According to the ABC, its U.S. member companies have invested over $1.5 billion in the Pakistani economy while generating $3 billion in revenues. ABC and ABF members pay direct and indirect taxes in Pakistan, contributing significantly to the national treasury. Despite common emerging market challenges, such as intellectual property rights enforcement, contract disputes, broader economic and governance issues, and discrete security-related concerns in some parts of the country, the Pakistani market offers attractive trade and investment opportunities for American companies. Favorable factors include the absence of shareholding restrictions (outside of a few sensitive sectors), straightforward work permit rules, no technology transfer requirements, strong support from the government (including in mitigating any security-related concerns), and a large, sophisticated entrepreneurial class.
Pakistan and the United States signed a Trade and Investment Framework Agreement (TIFA) in 2003, establishing the primary mechanism for discussions on trade and investment issues between the two countries. The most recent TIFA intersessional meeting, co-chaired by the Assistant U.S. Trade Representative for South and Central Asia and Pakistan’s Commerce Secretary was held in April 2024. 

As Pakistan’s economic recovery has progressed steadily, with real GDP growth rising to 2.68% in FY24 from 2.5% the previous year, foreign exchange reserves have exceeded $15 billion, inflation has fallen to record lows, and the rupee has remained stable against the dollar. The country also recorded its first current account surplus in nearly 15 years, signaling macroeconomic stabilization; however, poverty remains very high at 42.3%, limiting gains in household welfare and discretionary consumer spending. 

As of March 2025, Pakistan’s installed electricity generation capacity stood at 46,605 MW, with over 45% sourced from hydropower, nuclear, and renewables. Despite this, electricity consumption from the national grid declined by 3.6% in the last year due to higher power prices, which reduced demand, subdued industrial activity, and the increased adoption of off-grid solar power. On the digital front, only 21% of adults reported receiving digital payments, underscoring significant untapped potential in financial inclusion. 

To tackle long-standing structural challenges, the government launched the Uraan Pakistan (2024–29) plan in December 2024, focusing on export-led growth, digital transformation, and human capital development to create prosperity, address the trade deficit, curb inflation, and build foreign reserves. This initiative aligns with the World Bank’s upcoming $20 billion Country Partnership Framework, set to begin in 2026, which targets climate resilience, education, and energy sector reforms. In May 2025, the government initiated a five-year plan to reduce tariffs, which are the highest in South Asia, and to boost exports and improve competitiveness in the domestic industry.  

From a business environment standpoint, Pakistan is classified as a lower-middle-income economy. According to the World Bank’s B-READY score, it earned 65.9 out of 100, placing it in the third quintile among 50 assessed countries. Strong performance in Business Entry (91.5), Financial Services (68.0), and Utility Services (59.2) reflects the country’s streamlined corporate registration procedures and improved access to basic infrastructure. However, weaker performance in International Trade (45.7), Dispute Resolution (42.0), Market Competition (46.2), and Business Insolvency (48.8) highlights critical gaps in regulatory efficiency, legal frameworks, and institutional capacity that continue to constrain private sector development.

Political Environment

Visit the State Department’s website for background on the country’s political and economic environment: https://www.state.gov/countries-areas/pakistan/