Business

Pakistan vows to fulfill IMF promises after averting default threat

Published

2 years ago

Farwa

PM Shehbaz hopes IMF board will approve $3 billion bailout.
“The agreement will go through, God willing,” premier says.
IMF executive baord will meet on July 12 to approve loan.

Prime Minister Shehbaz Sharif said Wednesday that Pakistan would fulfill its commitments made to the International Monetary Fund (IMF) to secure a short-term financing deal, helping the cash-strapped nation avert a default in the near future.

A staff-level agreement on the $3 billion stand-by agreement (SBA) was reached between the local authorities and the IMF team, with the lender’s executive board to give final approval on July 12.

The economy has been stricken by a balance-of-payments crisis as it attempts to service crippling external debt, while months of political chaos have scared off foreign investment.

Inflation has rocketed, the rupee has reached a record low against the dollar, and the country is struggling to afford imports, causing a severe decline in industrial output.

“The agreement will go through, God willing,” PM Shehbaz said during a ceremony to mark a decade since the China-Pakistan Economic Corridor (CPEC) signing in Islamabad.

Finance Minister Ishaq Dar has said Pakistan stands to receive a first installment of $1.1 billion, which will come only after the board’s approval.

Pakistan has averted the threat of default, the premier said, noting that the IMF deal has given the country an opportunity to move towards development.

“We need to work hard and save the poor people from inflation. The elite (or those with money) need to play a role in this regard,” he said.

The prime minister thanked President Xi and the Chinese government for supporting Pakistan, especially when it awaited the staff-level agreement with the IMF.

He also acknowledged the assurances from Saudi Arabia, the United Arab Emirates, and Islamic Development Fund, which helped Pakistan overcome its financial crisis.

In his address to the ceremony, the premier termed CPEC a “very transparent” project and said the Chinese government and companies made investments of $25.4 billion investment in various projects.

He said thousands of Chinese workers and their Pakistani counterparts worked day and night to create a history of commitment and vitality of goodwill between the two sides.

Business

E&P Companies Will Invest $5 Billion in Pakistan’s Petroleum Industry

Published

1 day ago

Farwa

Over the next three years, local and foreign companies involved in Pakistan’s oil and gas exploration and production sector have shown a strong desire to invest more than $5 billion in the nation’s energy sector.

Recent changes to the Petroleum Policy and the implementation of an exclusive tight gas policy, which provide better incentives and a more investor-friendly regulatory framework, are credited with the increase in investor confidence.

These strategic changes are expected to boost domestic energy production, open up new avenues for growth, and draw large amounts of both domestic and foreign investment.

Business

With inflation slowing, the SBP is anticipated to lower the policy rate for the eighth time in a row.

Published

1 day ago

Farwa

Businesspeople anticipate another reduction in the policy rate when the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) releases the updated rate.

The interest rate for the upcoming two months will be announced by the central bank. It is still unclear if the rate will stay the same or be lowered to reflect stakeholder expectations.

According to experts, the policy rate will be lowered in order to further boost the nation’s economic sector.

Interest rates may be lowered for the seventh time in a row if the inflation rate declines significantly more than anticipated.

In its last six sessions, the MPC had cut the policy rate by 10 percent. In January 2025, it decreased the rate by one percent to 12pc.

12PC POLICY RATE

In January, the State Bank of Pakistan (SBP) announced cut in key policy rate by 100 basis points (bps) to 12 percent from 13pc in line with expectations of the business community.

The policy rate, which had been at 22 percent since June 2024, was slashed by 1,000 basis points to 12 percent.

The SBP governor said the decision was taken with careful consideration. “Although inflation is expected to decline next month (February), core inflation remains a pressing concern,” he stated.

Ahmed highlighted strong remittance inflows and robust export growth as key factors supporting the current account.