Policy commitments made by Pakistan to continue to apply — IMF representative

A Pakistani vendor (R) waits for customers as he sells cheap clocks on a footpath in Saddar bazaar, a neighbourhood of Karachi, on March 15, 2010. (AFP/File)
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Updated 04 October 2022

Policy commitments made by Pakistan to continue to apply — IMF representative

  • Islamabad was only recently able to restart an IMF bailout package after agreeing to difficult reforms
  • The agreements included implementation of market-determined currency exchange rate, raising fuel prices

ISLAMABAD: The resident representative of the International Monetary Fund (IMF) said on Monday that policy commitments made by Pakistani authorities to resume the support program continue to apply.

The country was only recently able to restart an IMF bailout package after agreeing to undertake difficult reforms. One of the agreements was to implement a market-determined exchange rate and to stop government intervention in the central bank.

Pakistan’s newly appointed finance minister, Ishaq Dar, last week also slashed fuel prices — reversing a policy of raising prices monthly through added levies to ensure enhanced revenues as agreed with the IMF. Dar also said on Monday that the country’s currency would strengthen to under 200 rupees to the dollar.

The rupee is currently at around 227 to the greenback, and the currency has been in turmoil, falling as much as 30 percent this year.

“Policy commitments made by the Pakistani authorities as part of the Seventh and Eighth review under their IMF-support program continue to apply,” IMF representative in Islamabad Esther Pérez Ruiz told Reuters.

She said policy discussions, including how to target support to those affected by the floods while maintaining macroeconomic stability, will commence in coming weeks after the damage assessment report becomes available.

Pakistan’s economy is facing a balance of payments crisis, a widening current account deficit, a slide in currency, and double-digit inflation.

In September, Pakistan’s bonds slumped to just half their face value after the Financial Times said a United Nations development agency was urging the cash-strapped country to restructure its debt.

A memorandum the United Nations Development Programme (UNDP) was set to hand Pakistan’s government said its creditors should consider debt relief in the wake of the floods, according to the Financial Times.

The memorandum further proposed debt restructuring or swaps, in which creditors would forego some repayments in exchange for Pakistan’s agreement to invest in climate change-resilient infrastructure, the paper said.

Neither the foreign office in Islamabad or a UNDP spokesperson in Pakistan immediately responded to Reuters’ request for comment on the memorandum. The country’s finance and information ministers could also not be reached.

The bond market reaction strengthened fears of another default by Pakistan, hammering its international market government debt.

One of the main sovereign bonds due for repayment in 2024 slumped more than 10 cents to about 50 cents on the dollar, while another due in 2027 fell to about 45 cents.

Saudi Arabia, UAE absorbed 77.5% of Pakistani expat workers in 2022 — economic survey

Updated 12 sec ago

Saudi Arabia, UAE absorbed 77.5% of Pakistani expat workers in 2022 — economic survey

  • More than 96% of Pakistani registered workers for overseas employment were in Gulf Cooperation Council countries in 2022
  • As of December 2022, over 12.4 million Pakistanis used official procedures to travel abroad for employment in over 50 countries

KARACHI: Saudi Arabia and the United Arab Emirates alone absorbed more than 77.5 percent of total 829,549 Pakistani expat workers in 2022, according to the Pakistan Economic Survey 2022-23 released on Thursday.

The yearly flagship publication of the Ministry of Finance highlights the trend of macro-economic indicators and development policies and strategies, as well as sectoral achievements of the economy.

The survey revealed that as of December 2022, more than 12.4 million Pakistanis had used official procedures to travel abroad for employment in over 50 countries including 829,549 Pakistani who travel in 2022.

“More than 96 percent of Pakistani registered workers for overseas employment are in Gulf Cooperation Council (GCC) countries, especially Saudi Arabia and the United Arab Emirates,” the economic survey said. 

“They are contributing to the development of Pakistan’s economy by sending remittances, which is the major source of foreign exchange after exports.”

Citing data from the Bureau of Emigration and Overseas Employment (BE&OE), the economic survey said more than 62 percent, or 514,725 Pakistanis workers, moved to Saudi Arabia followed by UAE, at 15.5 percent, to earn their livelihoods in 2022.

“Oman provided jobs to 82,380 or 9.9 percent and Qatar accommodated 57,984 or 7 percent Pakistani workers of different occupations,” the survey report said.

“Bahrain and Malaysia welcomed 13652 or 1.6 percent workers, and 6175 or 0.7 percent workers, respectively.”

The regional breakdown of those who traveled abroad during 2022 showed the highest number from Punjab (458, 241) followed by Khyber Pakhtunkhwa (224,88) and Sindh (59,067).

The survey said Pakistan had developed a comprehensive diversification strategy developed for five top priority countries including Saudi Arabia, UAE, Malaysia, Qatar and Oman along with five potential and non-traditional countries such as Kuwait, South Korea, Japan, Germany and China to promote the export of manpower.

Pakistan wins seat on UN Economic and Social Council

Updated 08 June 2023

Pakistan wins seat on UN Economic and Social Council

  • Pakistan has in the past served ten times on the economic and social work body
  • It has served as the body’s president in 1952, 1957, 1975, 1995, 2005 and 2020

ISLAMABAD: Pakistan was on Thursday elected to the United Nation's Economic and Social Council (ECOSOC) for a three-year term beginning January 1, 2024, state-run APP reported on Thursday.

The Economic and Social Council, under the overall authority of the UN General Assembly, coordinates the economic and social work of the UN and the UN family of organizations. The ECOSOC is responsible for promoting higher standards of living, full employment, and economic and social progress, identifying solutions to international economic, social and health problems, facilitating international cultural and educational cooperation, and encouraging universal respect for human rights and fundamental freedoms.

Ambassador Munir Akram, Pakistan’s permanent representative to the UN, said Pakistan’s election to the body was a recognition of “our positive role in international diplomacy.”

In balloting in the 193-member General Assembly, Pakistan received 129 votes. A two-third majority – 124 votes – was required for election.

“We’re very gratified at Pakistan’s success in an highly contested election. Our success is a recognition of Pakistan’s importance and its positive role in international diplomacy,” Akram said.

“We hope to play yet once again our active role in the forum of ECOSOC by fostering agreement on the structure and content of new, more dynamic and equitable structure of international economic cooperation.”

Others elected on the Asian seats are: Japan (127 votes) and Nepal (145 votes). Iraq, with 50 votes, and Tajikistan, with 120 votes, did not make it.

Pakistan has in the past served on the ECOSOC 10 times, and in the capacity as the 54-member body’s President six times in 1952, 1957, 1975, 1995, 2005 and 2020.

Pakistan says has ‘full trust’ in UAE’s Al-Jaber as COP28 president

Updated 08 June 2023

Pakistan says has ‘full trust’ in UAE’s Al-Jaber as COP28 president

  • UAE, a major OPEC oil exporter, will be second Arab state to host the climate conference after Egypt in 2022
  • Pakistan says the UAE had over the years demonstrated “strong commitment” to renewable energy sources

ISLAMABAD: Pakistan’s foreign office said on Thursday it had “full trust” in the nomination of Sultan Ahmed Al-Jaber, the UAE’s climate envoy and minister of industry and technology, as president of this year’s UN climate conference, COP28.

Al-Jaber's appointment to lead the climate summit this year fuelled activists' worries that big industry was hijacking the world's response to the global warming crisis.

The UAE, a major OPEC oil exporter, will be the second Arab state to host the climate conference after Egypt in 2022.

The UAE and other Gulf energy producers have called for a realistic energy transition in which hydrocarbons would keep a role in energy security while making commitments to decarbonisation.

“Pakistan has full trust that under the stewardship of H.E. Sultan Ahmed Al Jaber as President of COP28, we will be able to drive the global agenda on climate change in a positive direction decisively in December 2023,” the foreign office said.

“Pakistan believes that the United Arab Emirates’ Presidency of COP-28 is an opportunity for meaningful progress and effective global action on key areas to mitigate and reverse the negative impacts of climate change.”

The foreign office said the UAE had over the years demonstrated a “strong commitment” to renewable energy sources, such as solar and wind power, and through initiatives like the Masdar City project, the Abu Dhabi Clean Energy Strategy, the UAE Net Zero by 2050, and clean fossil fuels, the Emirates had made “substantial investments” in leading global efforts for achieving the goal and targets of the United Nations Framework Convention on Climate Change and its Paris Agreement.
The UAE has also manifested its commitment towards combating climate change by implementing several sustainable initiatives to mitigate climate change effects.

“For instance, the Mohammed bin Rashid Al Maktoum Solar Park, one of the largest renewable energy projects globally, contributes to reducing carbon emissions,” the foreign office added. 

“The UAE has also invested in sustainable agriculture, water conservation, and waste management, demonstrating a comprehensive approach to addressing various aspects of the climate crisis.”
Pakistan said UAE’s strategic location allowed it to play a key role in addressing climate change by serving as “a bridge between the global north and global south in fostering international cooperation, knowledge sharing, and innovation to find common solutions.”

Pakistan set for 0.29% GDP growth in FY23, well below target of 5%

Updated 08 June 2023

Pakistan set for 0.29% GDP growth in FY23, well below target of 5%

  • Finance minister says 0.29% GDP growth a “realistic achievement,” anything higher not achievable
  • Fiscal deficit 4.6% of GDP for fiscal year up until April, slight improvement from last year’s 4.9 percent

KARACHI: Pakistan has missed its Gross Domestic Product (GDP) target by 4.7 percent and is likely to post GDP growth of 0.29 percent in the fiscal year ending June 2023, well below the target of 5 percent set last year, according to the country's economic survey launched on Thursday.  


This was revealed as Pakistani Finance Minister Ishaq Dar presented the Pakistan Economic Survey 2022-23, a yearly flagship publication of the Ministry of Finance which highlights the trend of macro-economic indicators and development policies and strategies, as well as sectoral achievements of the economy.

Dar will present the annual budget document before parliament tomorrow, Friday. 

Addressing a press conference, Dar called the outgoing year “a difficult year for the economy,” saying the coalition government faced “extreme challenges” when it came to power in April 2022.

Indeed, the country’s economy has suffered record high inflation and an economic slowdown compounded by devastating floods last year and a failure so far to unlock crucial finances from the International Monetary Fund. The IMF had demanded a number of prior actions from Pakistan, including reversing subsidies, a hike in energy and fuel prices, jacking up its key policy rate, a market-based exchange rate, arranging for external financing and raising over 170 billion rupees ($613 million) in new taxation.

The fiscal adjustments have already fuelled Pakistan's highest ever inflation, which hit 37.97% year-on-year in May, but the IMF has yet to release the $1.1 billion funding stalled since November as part of the $6.5 billion Extended Fund Facility agreed in 2019.




“Pakistan has paid a huge political cost of meeting IMF reforms … the structural reforms, the power reforms, gas reforms,  the fiscal reforms … we had to do the pending actions,” Dar told reporters.

“For Pakistan, this political cost was worth it … The revival of this [IMF] program was important because of Pakistan’s credibility.”

Dar said he was hopeful the 9th review of the program would be concluded soon.

“The first priority is to pay off sovereign debts, then food and pharmaceutical imports,” Dar said, adding that the government had repaid $6.5 billion in international commercial loans, with $1.0 billion of that amount being in the form of international Sukuk.

The Economic Survey document said the Pakistan economy lost momentum in the first quarter of the ongoing fiscal year “due to the severe downturn in the global economy and flash floods of July-August 2022 and as a result the economy suffered from significant domestic supply disruptions.”

Pakistan estimated flood damage at Rs3.2 trillion ($14.9 billion) and loss to GDP at Rs3.3 trillion ($15.2 billion), and recorded the need for rehabilitation of damages at Rs3.5 trillion ($16.3 billion). On the international front, the prolonged Russia-Ukraine conflict had adversely affected global growth and inflation remained unexpectedly high, the document said.

The survey report revealed that agriculture sector growth remained 1.55 % as compared to 4.27% last year, industry posted negative growth at -2.94 % against 6.83% last year while manufacturing posted -3.91% against 10.86 % last year and wholesale and retail trade posted -4.46% as compared to 10.3% last year.

Average year-on-year inflation rate for the period up to May 2023 was recorded at 29.2 percent, the survey found.

In April and May, the country’s inflation hit record levels, which were also the highest in Asia.

The survey said Pakistan’s inflation had been driven by international commodity prices, global supply disruptions, flood damage to crops, currency depreciation, and political uncertainty in the country.

The fiscal deficit was 4.6 percent of GDP for the fiscal year up until April, a slight improvement from last year’s 4.9 percent, the survey showed, adding that the primary balance recorded a surplus of 99 billion Pakistani rupees.

Fresh challenge for ex-PM Khan as former associates announce new Pakistan political party

Updated 08 June 2023

Fresh challenge for ex-PM Khan as former associates announce new Pakistan political party

  • Now estranged longtime Khan ally Jahangir Khan Tareen announces Istihkam-e-Pakistan Party flanked by other ex-associates
  • Tareen’s announcement will fuel fire of widespread speculations that ‘king’s party’ was being primed as viable against Khan’s PTI

ISLAMABAD: Estranged associates of former Prime Minister Imran Khan came together on Thursday and announced setting up a new political party, the Istihkam-e-Pakistan Party, creating a fresh challenge for the embattled ex-premier amid a widening crackdown.

The announcement of a new party by sugar baron Jahangir Khan Tareen, who was for over a decade Khan’s closest confidant but fell out with him in 2020, will add fuel to the fire of widespread speculation that a ‘king’s party’ was being primed as a viable alternative to Khan, whose Pakistan Tehreek-e-Insaf party is arguably the most popular political party in the country.

In Pakistan, the king’s party is a common euphemism for one favored by the all-powerful military.

Since being ousted from the PM’s office in a no-trust vote in April last year, Khan has launched an unprecedented campaign of defiance against the military, which independent analysts say helped him rise and fall from power.

His tensions with the military reached a crescendo last month when Khan was arrested in a land fraud case on May 9, prompting violent nationwide protests in which rioters attacked an air base, military properties, including the army’s headquarters, and burnt a top general’s home. The military has since said it will punish the enactors and masterminds of the violence, including by trying them in military courts. The government of Prime Minister Shehbaz Sharif has threatened to ban Khan’s PTI and dozens of his close associates and party members have announced quitting his party while hundreds of his supporters are under arrest. 

“Today we are setting the foundations of a new party, the Istihkam-e-Pakistan Party,” Tareen announced at a press conference in which he appeared with some of Khan’s closest ex-aides, including Ali Haider Zaidi, Aleem Khan, Imran Ismail and Tanveer Ilyas.

“We have all gathered here today because we want to make a serious effort together to get Pakistan out of this quicksand of difficulties.”

Tareen, who was widely known as one of the main financiers of Khan’s party and seen as instrumental to his rise to the PM’s office in 2018, said he had joined the PTI to bring promised reforms to Pakistan.

“I was sure we would be able to use the platform of this [PTI] party to bring those reforms that Pakistan always needed and still needs,” Tareen said. “That’s why we worked day and night to make PTI a strong political force. All of the people sitting here were part of that struggle.”

He said people had voted for the PTI in 2018 because it had promised to fix the economy, improve foreign relations and above all, root out corruption and carry out accountability.

“But things did not go on as we had planned and people started to feel disillusioned,” Tareen said.

“Pakistan today needs a political leadership that eliminates social and political divisions. Our nation needs hope … our politics need a new face.”

Speaking about the violence that took place after Khan’s arrest on May 9, Tareen said it was his belief that Pakistan would plunge into chaos if those behind the actions were not punished.

In a strongly-worded statement released on Wednesday and seen as a reference to Khan, the army said it was time to tighten the “noose of law” against those who had masterminded the attacks of May 9.

In recent days, Khan has openly accused the military of trying to destroy his party, saying he has “no doubt” he will be tried in a military court and jailed as part of the army-backed crackdown on his party.

Responding for the first time to widespread accusations that the army was behind a crackdown against Khan, his party and its supporters and carrying out human rights violations, the military on Wednesday called this “fake news and propaganda” that it would defeat with the support of the Pakistani public:

“Unfounded and baseless allegations on Law Enforcement Agencies and Security Forces for custodial torture, human rights abuses and stifling of political activities are meant to mislead the people and malign Armed Forces in order to achieve trivial vested political interests.”