ISLAMABAD: Pakistan has reached a staff-level agreement with the International Monetary Fund (IMF) for a new $7 billion loan program, the IMF said on Friday, the country’s latest move to turn to the global lender for assistance in keeping its fragile economy afloat.
Pakistan completed a short-term $3 billion IMF program in April this year, with the release of a final tranche of $1.1 billion. The facility helped Islamabad avert a default last year. Pakistan’s Finance Minister Muhammad Aurangzeb said his government planned to seek a longer-term loan from the IMF to help stabilize the $350 billion economy after the end of the last program.
The IMF said the new loan deal, which will span 37 months, was aimed at strengthening fiscal and monetary policy as well as reforms to broaden the tax base, improve management of state-owned enterprises, strengthen competition, secure investment, enhance human capital, and scale up social protection through increased generosity and coverage in major welfare programs.
“The program aims to capitalize on the hard-won macroeconomic stability achieved over the past year by furthering efforts to strengthen public finances, reduce inflation, rebuild external buffers and remove economic distortions to spur private sector-led growth,” IMF’s mission chief to Pakistan Nathan Porter said in a statement.
The deal, which is subject to approval by the IMF executive board, came after the government of Prime Minister Shehbaz Sharif presented its first budget in parliament last month, promising an increase of up to 25 percent in salaries of government employees and setting an ambitious tax collection target.
The finance minister said Pakistan wanted to collect Rs13 trillion ($44 billion) in taxes, which would be 40 percent more than the last fiscal year’s. He said the government would ensure an increase in the number of taxpayers the country from the existing 5 million people who paid taxes in Pakistan.
Analysts said the new budget of about $68 billion, up from $50 billion in the last year, was likely to land a longer-term IMF bailout of up to $8 billion to help stabilize the economy.
Pakistan reaches new $7 billion loan deal with IMF, says lender
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Pakistan reaches new $7 billion loan deal with IMF, says lender
- The new loan deal, which will last for 37 months, is aimed at strengthening fiscal and monetary policy as well as reforms
- The program aims to capitalize on the hard-won macroeconomic stability achieved over the past year, says IMF’s mission chief
War then water: Pakistan’s border villagers face back-to-back evacuations
- The back-to-back displacements have underscored the vulnerability of communities straddling Pakistan’s volatile eastern border
- Officials warn the crisis could worsen as climate change intensifies monsoons, cross-border river disputes strain disaster planning
KASUR: When floodwaters from across the Indian border surged into her village in eastern Pakistan this month, Shama knew what to do: gather her four children and prepare to leave. It was the second time this year she had to flee, after abandoning her home during cross-border fighting between India and Pakistan in May.
“How many times do we need to evacuate now?” the 30-year-old mother said, her husband away ferrying their 10 cows to higher ground on a boat. “We lost out on so much during the war like school days for the children, and now the water is forcing us out again. Trouble is trouble.”
Shama’s ordeal is echoed across flood-hit Kasur, where families say they are exhausted by repeated displacements within months, first from the fighting, now from nature.
“The floods started earlier this month and only got worse,” said 27-year-old mother Bibi Zubaida, who lives with seven relatives in a three-bedroom house opposite a mosque that now broadcasts evacuation calls.
From the mosque loudspeakers, usually reserved for the call to prayer, came a different message: boats were ready for anyone who wanted to leave.
“When you live here, you choose to live with the threat of war and the threat of floods. Where does one go?” Zubaida said.
Kasur lies just a few kilometers from the Indian border. From their rooftops and rescue boats, residents said they could see Indian checkposts across the horizon, a reminder of how closely their fate is tied to decisions made on the other side. The nations share rivers that were regulated for more than six decades under the Indus Waters Treaty. That agreement was suspended by India earlier this year, following the shooting of 26 people by militants that New Delhi said were backed by Islamabad, which Pakistan denies.
That attack triggered brief but intense cross-border battles between the nuclear-armed neighbors, driving villagers like Shama from their homes. Then came the monsoon, and the rivers turned to flood.
On narrow wooden boats, families balanced motorcycles, belongings, and bleating goats alongside their children, as rescue workers steered them through fields now turned into rivers.
Rescue worker Muhammad Arsalan said many villagers hesitated to evacuate.
“People don’t always want to leave because they’re scared of thieves stealing what they’re leaving behind. They’re reluctant because they’ve done it so many times already,” said Arsalan, who has ferried more than 1,500 people to safety by boat in recent days.
“They love their goats and sheep, and sometimes refuse to leave without them,” he added, pausing to clear leaves stuck in the motor before restarting another run.
The Punjab provincial disaster management authority said flows in the Sutlej River at Ganda Singh Wala were the highest in decades, after a breach at an Indian barrage. At least 28 deaths have been reported so far, with water pushing further south through Punjab and threatening new areas.
In India, cloud bursts in Ramban and Mahore regions of Jammu and Kashmir killed 10 people. Pakistani officials said the crisis was worsened by India’s decision to suspend the Indus Waters Treaty, halting the decades-old exchange of river data. Islamabad also accused India of releasing large volumes of water without adequate warning.
“If the treaty was in operation, we could have managed the impact better,” Pakistan’s Planning Minister Ahsan Iqbal told Reuters on Friday.
India has denied deliberately flooding Pakistan. It has blamed incessant monsoon rains and said it issued multiple flood alerts. Two gates of the Madhopur barrage on the Ravi River were damaged by surging water, Indian officials said.
Farmers say the deluge has wrecked their livelihoods. “Thirteen of my 15 acres (6 hectares) are gone,” said Muhammad Amjad, a rice and vegetable grower. “Women and children are mainly evacuated. Men stay behind to guard what’s left.”
The back-to-back displacements have underscored the vulnerability of communities straddling Pakistan’s volatile eastern border.
Officials warn the crisis could worsen as climate change intensifies monsoons and cross-border river disputes strain disaster planning.
“I’ve seen many floods, but they are coming too often now,” said Nawabuddin, a 74-year-old landowner, recalling the most memorable floods he witnessed in his lifetime — 1988, 2023 and now this one. “We don’t want war, we don’t want excess water. We just want to live,” said Zubaida, whose newly renovated home and farmland now lie underwater.
Finance minister meets UAE investors, highlights various opportunities in Pakistan
- The UAE is Pakistan’s third-largest trading partner after China and the United States, and a major source of foreign investment
- Muhammad Aurangzeb hopes for concrete investments and joint ventures with UAE after his interaction with Emirati businessmen
ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb on Friday held a key meeting with a delegation of leading investors and businessmen from the United Arab Emirates (UAE) and shared with them various investment opportunities in Pakistan, an official said.
The delegation, led by Mohamed Baradei, Group CIO of the Abu Dhabi-based EIX global investment and strategic advisory firm, was briefed on the state of Pakistan’s economy and the wide-ranging structural reforms undertaken recently, according to Finance Adviser Khurram Schehzad.
Aurangzeb highlighted the achievement of a primary surplus after many years, the return of inflation to single digits, stable currency, robust foreign exchange reserves and validation from leading international rating agencies which are now aligned in their improved assessment of Pakistan’s economy.
The development comes as Pakistan, currently bolstered by a $7 billion International Monetary Fund (IMF) program, continues to make efforts to boost trade and foreign investment as it treads a long path to sustainable economic growth.
“Senator Aurangzeb underscored the government’s commitment to addressing investor concerns, noting that taxation reforms, tariff rationalization, privatization of state-owned enterprises, and a series of bold structural measures were aimed at fundamentally transforming the DNA of the economy,” Schehzad said on X.
“He informed the investors about promising opportunities in the mining sector, especially the Reko Diq project, which is expected to significantly strengthen Pakistan’s external sector through sustainable foreign inflows.”
The UAE is Pakistan’s third-largest trading partner after China and the United States, and a major source of foreign investment valued at over $10 billion in the last 20 years, according to the UAE’s foreign ministry.
Policymakers in Pakistan consider the Emirates an optimal export destination due to their geographical proximity, which minimizes transportation and freight costs while facilitating commercial transactions.
Both countries have stepped up efforts in recent years to strengthen their economic relations. In Jan. 2024, Pakistan and the UAE signed multiple agreements worth more than $3 billion for cooperation in railways, economic zones and infrastructure.
Aurangzeb noted while Pakistan’s exports and remittances were “healthy,” the country’s stock exchange has been witnessing unprecedented activity, with over 70,000 new investors entering the market that reflected the growing confidence among both domestic and foreign investors.
He shared updates on the government’s upcoming industrial policy, which will provide a roadmap for further improving the investment climate, and noted that bold tariff reforms and the launch of digital and export promotion policies indicate the government’s future trajectory of reforms.
“[The visiting UAE delegation] expressed confidence in Pakistan’s potential, pointing to the state of its infrastructure, its demographic advantage, and the opportunities available for strategic and long-term investments,” Schehzad said.
“They emphasized that they brought not only capital but also strategic know-how to the table, and conveyed their strong interest in being ahead of the curve as Pakistan continues on its reform journey. The delegation also underscored that increasing capital and human flows between Pakistan and the UAE would contribute to deepening economic ties, noting that both countries were well positioned to grow together through mutually beneficial partnerships and collaborations.”
The finance minister reaffirmed that Pakistan attaches great importance to its partnership with the UAE and hoped that the momentum generated by this engagement will translate into concrete investments and joint ventures, further strengthening economic bonds between the two nations.
Pakistan PM in China on six-day visit to meet President Xi, attend regional summit
- Shehbaz Sharif will interact with Chinese business leaders and corporate executives to discuss trade and investment
- Over 20 foreign leaders, including India’s Modi and Russian President Vladimir Putin, will attend the regional summit
ISLAMABAD: Prime Minister Shehbaz Sharif is due to arrive in China on Saturday for a six-day visit to attend a regional summit and hold meetings with President Xi Jinping and Premier Li Qiang, with political, economic and investment ties topping the agenda.
Sharif’s visit, from Aug. 30 till Sept. 4, underscores the strong and multifaceted partnership between the two countries, which spans defense, diplomacy and economic cooperation.
China has long been Pakistan’s largest investor and its closest strategic ally, anchored by the multibillion-dollar China-Pakistan Economic Corridor (CPEC). Both sides are working to advance into “CPEC 2.0,” focused on industrialization, agriculture, energy and connectivity.
“Departing on a historic visit to China! Will participate in the SCO (Shanghai Cooperation Organization) Council of Heads of State Meeting in Tianjin,” Sharif said on X on Saturday morning. “I look forward to meeting H.E. President Xi Jinping and other world leaders to further build upon our bilateral ties with China.”
China has long sought to present the SCO as a counterweight to Western-led power blocs and has pushed for greater collaboration between its 10 members.
More than 20 foreign leaders including Indian Prime Minister Narendra Modi and Russian President Vladimir Putin will attend the regional security bloc’s largest meeting since it was founded, China’s Assistant Foreign Minister Liu Bin said Friday. Top politicians from member states or guest countries such as Belarus, Iran, Kazakhstan, Pakistan, Turkiye and Vietnam are also among those taking part.
Pakistan’s foreign office earlier said that Sharif’s meetings with President Xi and Premier Li will focus on multifaceted dimensions of Pakistan-China bilateral cooperation.
“He would also attend the military parade with President Xi and other world leaders being held in Beijing to commemorate the 80th anniversary of the World’s Anti-Fascist War,” it said, using a term widely employed in China to describe World War II.
Sharif would also interact with Chinese business leaders and corporate executives to discuss trade and investment and address a Pakistan-China Business-to-Business (B2B) Investment Conference in Beijing, according to the foreign office. Sharif’s engagements are part of leadership-level exchanges that both governments describe as vital to maintaining their “all-weather strategic cooperative partnership.”
The foreign office said the visit will reaffirm support on core interests, strengthen bilateral cooperation and ensure regular consultations on regional and global developments.
Sharif also visited China in June 2024, when he held talks with Xi and Li in Beijing, toured cultural and educational sites in Xi’an, and announced that 1,000 Pakistani students would receive agricultural training in China.
That five-day trip included meetings with leading Chinese companies in the energy and technology sectors, as the government strives to encourage foreign investors to explore manufacturing and other opportunities in Pakistan.
Authorities postpone anti-polio drive in nine Punjab districts due to flood situation
- Pakistan’s polio program announced an anti-polio vaccination campaign in 99 districts across the country
- The development days comes after Pakistan confirmed two more polio cases, bringing the 2025 tally to 23
KARACHI: Pakistani health authorities have postponed an anti-polio campaign in nine districts in the eastern Punjab province due to floods, the country’s polio program said on Friday.
Rivers in Pakistan, particularly Chenab, Ravi and Sutlej, have swelled to dangerous levels due to record monsoon rains and excess water released from upstream India, forcing hundreds of thousands to evacuate in the most populous Punjab province.
Pakistan’s polio program has announced an anti-polio vaccination campaign in 99 districts across the country, starting Sept. 1, with an aim to inoculate more than 28 million children against the crippling disease.
But the flood situation has forced health authorities to postpone the drive in Lahore, Sheikhupura, Kasur, Okara, Gujranwala, Sialkot, Multan, Muzaffargarh and Bahawalpur districts.
“The polio campaign in other parts of the country will start from September 1,” the polio program said in a statement. “The campaign in Rawalpindi, Attock, Mianwali, Faisalabad, DG Khan, Rajanpur and Rahim Yar Khan districts [of Punjab] will be held as per schedule.”
Polio is a highly infectious and incurable disease that can cause lifelong paralysis. The only effective protection is through repeated doses of the Oral Polio Vaccine (OPV) for every child under five during each campaign, alongside timely completion of all routine immunizations.
Pakistan confirmed two new polio cases in its northwestern Khyber Pakhtunkhwa province this week, bringing the total number of children affected by the virus this year to 23. The country and neighboring Afghanistan remain the only two where polio is still endemic.
Pakistan made significant progress in curbing the virus, with annual cases dropping from around 20,000 in the early 1990s to just eight in 2018. It reported six cases in 2023 and only one in 2021, but saw a sharp resurgence in 2024 with 74 cases recorded.
The polio program urged the masses to cooperate with vaccinators whenever they visit them: “Parents are appealed to make it mandatory for their children below 5 years of age to be given polio drops.”
Pakistan power minister warns solar net-metering may raise national costs
- Net metering lets users generate solar power, sell excess to the grid for credit or cash
- PM Shehbaz Sharif has directed further cuts in power tariffs, Sardar Awais Leghari says
ISLAMABAD: Pakistan’s Power Minister Sardar Awais Leghari on Friday warned that the use of solar net-metering facility could add an extra burden of Rs3-4 per unit on consumers, if allowed to continue unchanged.
Solar net-metering is a policy that allows homeowners and businesses to generate power using solar panels and export excess energy to the national grid. In Pakistan, it is a billing system through which consumers receive credits or monetary compensation for the surplus power they sell to the grid.
Approved in 2017 to promote solar energy, Pakistan’s net-metering policy pays Rs21 per unit for surplus solar power, including a Rs1.90 subsidy. In April last year, the energy ministry said the subsidy burden falls on the government and other consumers to benefit affluent households with solar panels.
Around 0.6 percent of total electricity consumers in Pakistan are net-metering users out of which 80 percent belonged to affluent areas of major cities while the remaining 99.4 percent of electricity consumers bear the burden of the net-metering costs, the energy ministry said in January this year.
“As for the matter of net metering, if it is allowed to continue in the same manner, then 200,000 to 300,000 people will benefit from it while placing an additional burden of Rs3-4 on the entire nation,” Leghari said at a press conference in Lahore.
Around 18 million consumers are already receiving electricity at a 70 percent discount, which was up from nearly six million consumers in recent years, according to the minister. Prime Minister Shehbaz Sharif has directed further cuts in electricity prices and officials at the energy ministry are “exploring different options” to achieve this.
Leghari had called for revising Pakistan’s existing net-metering system in January this year, saying that it was becoming unfeasible for the government.
“Solar net-metering has to change,” Leghari said while addressing a conference in Islamabad. “It is impossible for us to sustain the same cost of buying power from distributors the way we are.”
Pakistan has ideal climatic conditions for solar power generation, with most parts of the country receiving over nine hours of sunlight daily. According to the World Bank, utilizing just 0.071 percent of the country’s land area for solar photovoltaic (solar PV) power generation could meet Pakistan’s electricity demand.
The South Asian country, home to 241 million people, aims to transition to 60 percent renewable energy by 2030 and reduce projected emissions by 50 percent. However, despite a recent surge in solar power adoption, it remains far behind in achieving this goal.
