IMF, Pakistani officials begin formal talks in Islamabad for fresh bailout program

Federal Minister for Finance & Revenue Muhammad Aurangzeb in a Meeting with IMF Delegation led by IMF Mission Chief Mr. Nathan Porter in Islamabad on May 13th, 2024. (Photo courtesy: Government of Pakistan)
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Updated 13 May 2024
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IMF, Pakistani officials begin formal talks in Islamabad for fresh bailout program

  • The South Asian country last month completed a short-term $3 billion IMF program that helped stave off a sovereign default
  • While Islamabad expects a staff-level agreement by July, both sides have refrained from commenting on the size of the program

ISLAMABAD: A team of the International Monetary Fund (IMF) and Pakistani officials on Monday began formal talks in Islamabad for a fresh, longer-term bailout program for the cash-strapped South Asian country, the Pakistani finance ministry said.

The South Asian country, which has been facing low foreign exchange reserves, currency devaluation and high inflation, last month completed a short-term $3 billion IMF program that helped stave off a sovereign default, but the incumbent government of PM Shehbaz Sharif has stressed the need for a fresh, longer-term program.

While Islamabad has said it expects a staff-level agreement by July, both Pakistani and IMF officials have refrained from commenting on the size of the program. The South Asian country is expected to seek around $7-8 billion bailout from the global lender.

On Monday, the IMF team, led by Mission Chief Nathan Porter, met Pakistan Finance Minister Muhammad Aurangzeb, central bank governor, chairman of the Federal Board of Revenue and other officials to kickstart discussions on further engagement with the lender.

“The Finance Minister welcomed the IMF team and thanked them for the successful completion of the [$3 billion] Standby Arrangement (SBA),” the Pakistani finance ministry said in a statement.

“The Finance Minister apprised the IMF team of the improvement in the macro-economic indicators over the course of the SBA and underscored the government’s commitment to continue with and expand upon the reform agenda.”

Pakistan narrowly averted a default last summer and its $350 billion economy has slightly stabilized after the completion of the last IMF program, with inflation coming down to around 17 percent in April from a record high of 38 percent in May last year.

However, the South Asian country is still dealing with a high fiscal shortfall and while it has controlled its external account deficit through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2 percent this year, compared to negative growth last year.

Wall Street Bank Citi expects Pakistan to reach an agreement with the IMF of up to $8 billion program by end-July, and recommends going long on the country’s 2027 international bond.

“While longer-term challenges pertain, we see several positive catalysts supporting the Eurobonds,” Nikola Apostolov at Citi wrote in a note to clients.

“First, a larger and longer IMF EFF (Extended Fund Facility) program could be finalized by July – possibly a $7-8 billion 4-year program and secondly and a possible inflow of Saudi investments,” Apostolov said after a team from Citi visited Pakistan and met policymakers, including Finance Minister Muhammad Aurangzeb.

Citi said it expected Pakistan’s international 2027 bond to offer a sweet spot to investors with sufficient liquidity and large upside as risks of default dissipate further.

— With additional inputs from Reuters.
 


UN agencies report spike in Afghan arrests as nearly two million return from Pakistan

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UN agencies report spike in Afghan arrests as nearly two million return from Pakistan

  • UNHCR and IOM data show weekly spike in detentions, with Balochistan emerging as main hotspot
  • International rights groups say the deportation drive risks violating international protection obligations

ISLAMABAD: United Nations agencies for refugees and migration recorded a sharp rise in the arrest and detention of Afghan nationals in Pakistan since the beginning of the year, highlighting in a report this week that about two million Afghans have been repatriated to their country since late 2023.

According to a joint report released by the Office of the United Nations High Commissioner for Refugees (UNHCR) and the International Organization for Migration (IOM), the scale of the movement has gone up significantly.

“During the reporting period (4 – 10 January), a total of 1,726 Afghan nationals were arrested and detained, marking an 18 percent increase compared to the previous week,” the report said. “Cumulatively, from 15 September 2023 to 10 January 2026, 1,957,694 individuals have returned.”

The mass migration and deportation drive began on November 1, 2023, after Pakistani authorities announced a repatriation plan for “illegal immigrants,” mostly Afghans. The decision followed a spike in suicide bombings, which the Pakistani government said were carried out by Afghan nationals or by militants launching cross-border attacks from neighboring Afghanistan.
Islamabad has also blamed illegal Afghan immigrants and refugees for involvement in smuggling and other crimes, though Afghanistan denies the allegations.

In 2025, Pakistan expanded the scope of its deportation drive, moving beyond undocumented foreign nationals to include holders of Afghan Citizen Cards (ACC). The campaign was later extended to bearers of Proof of Registration (PoR) cards after their validity expired in June.

While PoR cards were meant to recognize Afghan refugees under a formal registration framework, ACCs were merely introduced to document Afghan nationality without conferring refugee status on those in possession of them.
“Out of all arrests and detentions during the reporting period ... ACC holders and undocumented Afghans represented 87 percent of the total rate of arrest and detentions, and PoR holders represented 13 percent,” the report said.

In addition to the arrests, the reporting period saw a marked increase in activity at the border. Between January 4 and January 10, 2026, alone, an estimated 19,666 Afghans returned through various crossing points including Torkham and Chaman, representing a 38 percent increase in returns and a 17 percent increase in deportations compared to the week prior.

The UN report noted that “fear of arrest remained the main reason for return among undocumented individuals and ACC holders (95 percent)” while PoR card holders cited “strict border entry requirements” as their primary driver for leaving.
Geographically, 73 percent of recent arrests occurred in Balochistan, with the Islamabad Capital Territory (ICT) also being a focal point with 16 percent of the total arrests following government directives for Afghans to relocate from the capital.

Earlier in January, Amnesty International renewed pressure on Islamabad, urging it to stop deportations.

“Amnesty International calls on the Pakistani authorities to halt the deportation of Afghan refugees and ensure that individuals with international protection needs are safeguarded as per international human rights law,” it said in an open letter addressed to Prime Minister Shehbaz Sharif.

Amnesty maintained Pakistan’s repatriation policy violated the principle of non-refoulement, which prohibits returning refugees to countries where they could face persecution or serious harm, and described the campaign as potentially “one of the largest forcible returns of refugees in modern history.”