Pakistan likely to receive over $1.2 billion under ongoing loan programme from IMF: Report
A staff-level agreement between the IMF and Pakistan was reached on March 27. This further paved the way for the board’s final approval.
Prolonged uncertainty due to the ongoing Middle East conflict poses downside risks to Pakistan’s economy, the State Bank of Pakistan (SBP) has warned. In its annual Financial Stability Review (FSR) for 2025, it said that this could potentially fuel inflation, disrupt economic growth and strain the external account of the country.
“A protracted and widespread conflict may keep oil prices higher for longer and disrupt global supply chains,” the SBP noted in its report, according to Geo News.
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It added, “Consequently, inflationary pressures may resurge, and the external account could come under strain, potentially affecting the growth momentum”.
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This comes at a time when Pakistan is looking forward to discussions with the International Monetary Fund (IMF) – likely from May 12 – for finalising the overall framework of the 2026-27 budget. Notably, the IMF’s Executive Board meets on May 8 in Washington, DC, to consider Pakistan’s request to complete the third review and release of the fourth tranche under the Extended Fund Facility (EFF). Also, it will consider the first review and release of the second tranche under the Resilience and Sustainability Facility (RSF), totaling $1.2 billion.
The SBP report further cities the Systemic Risk Survey, conducted in January, which indicated that independent experts foresaw geopolitical risk being the major risk at present and six months down the road. “This risk may have a spillover effect on the banking and financial sector of Pakistan,” Pakistan’s central bank added.
However, it claimed that the banking sector was “well positioned to withstand severe shocks as it is supported by strong financial cushions”.
On February 28, a massive operation was carried out by the United States and Israel as they launched airstrikes on Iran to target military and government sites in the country. This resulted in the assassination of several Iranian officials, including Supreme Leader Ali Khamenei.
In retaliation, Iran carried out missile and drone strikes against Israel, US bases and US-allied Arab countries in West Asia. It even closed the Strait of Hormuz, disrupting global trade.
Ultimately, this has disrupted global supply chains and increased shipping costs.
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