Top News
Next Story
Newszop

IMF Warns Pakistan Of Potential 'High Downside Risks' To Its Economy- Check Details

Send Push

The International Monetary Fund (IMF) has warned Pakistan and raised alarming concerns regarding Pakistan's economic trajectory, citing significant downside risks in its latest report. As talks between the Pakistani government and the IMF loom for a new long-term program, ANI reported critical issues citing the Dawn report on the critical issues highlighted by the IMF's assessment.

Heightened Risks and Political Uncertainty In PakistanThe IMF report highlighted the exceptionally high downside risks facing Pakistan's economy. Despite the government's intention to uphold standby arrangement (SBA) policies, political uncertainty looms large. This uncertainty could significantly impact policymaking, especially against the backdrop of soaring living costs and intricate political dynamics.


Challenges to Financial StabilityPolicy slippages, coupled with dwindling external financing, pose a serious threat to Pakistan's progress towards debt sustainability. The IMF warns that such lapses could exert pressure on the exchange rate, further exacerbating the country's financial woes. Additionally, external stability faces jeopardy from factors like surging commodity prices, disruptions in shipping, and tighter global financial conditions, as reported by ANI.


Highlighting the urgency of the situation, the IMF stresses the timely disbursement of post-programme external financing. While Pakistan recently concluded a short-term USD 3 billion program, Prime Minister Shehbaz Sharif has underscored the imperative for a fresh, longer-term arrangement to address the nation's persistent economic challenges.



Pakistan Economic Progress Amidst ChallengesDespite narrowly averting default last summer, Pakistan's economy has exhibited signs of stabilization, with inflation receding from a record high of 38 per cent in May to approximately 17 per cent in April. However, formidable hurdles remain, including a substantial fiscal deficit and sluggish growth, projected to hover around 2 per cent this year, contrasting with negative growth observed last year.


Pakistan Calls for IMF SupportTo confront these formidable challenges, Pakistan is poised to seek a minimum of USD 6 billion from the IMF. Additionally, it plans to request supplementary financing from the Fund under the Resilience and Sustainability Trust, as per ANI reported.
Loving Newspoint? Download the app now