Pre-poll tensions may hit Pakistan’s policy decisions, reforms: IMF

The International Monetary Fund (IMF) has warned about increasing risks to Pakistan’s economy, as intensification in geopolitical conflicts in Gaza and Israel could put pressure on the exchange rate and external stability.

Additionally, political tensions ahead of the upcoming elections may weigh on policy decisions and reform implementation. The IMF considers that the increasing debt burden poses another risk for Pakistan.

Pakistan has agreed with the IMF under structural benchmark conditions to further jack up gas prices and the deadline for notification has been envisaged at February 15, 2024. The government also agreed with the IMF to develop a plan to strengthen internal control systems in lending operations, including updates to collateral policy and counterparty eligibility policy, in line with recommendations from the 2023 safeguards assessment.