KARACHI: The International Monetary Fund’s (IMF) $3 billion bailout deal will provide much-needed fiscal space to Pakistan but not solve the country’s long-term problems, financial experts and economists said on Saturday.
Subject to the IMF’s board approval in July, the stand-by arrangement (SBA) provides breathing space to a Pakistani economy staring at default and in dire need of external financing. The staff-level pact was announced a day before Pakistan’s previous $6.5 billion loan program with the IMF expired.
Cash-strapped Pakistan will get $1.1 billion in funds under the new financing arrangement right after the IMF’s board meeting in mid-July. The new deal provides Pakistan more than the $2.5 billion disbursement it expected to receive under the Extended Fund Facility (EFF) program that concluded incompletely on June 30, 2023.
“The SBA provides some much-needed space to the Pakistani economy and will most certainly dampen near-term uncertainty,” Uzair Younus, director of the Pakistan Initiative at the Washington-based think tank, the Atlantic Council, told Arab News.
“However, the economy remains in a precarious situation and the government has to try and sort out some of the major issues in the energy sector, reduce distortion in the exchange rate market, and adopt a policy framework that doesn’t just burn the external financing the country has unlocked to achieve near-term political objectives.”
Economists say the deal will only offer Pakistan short-term respite.
“It will not solve long-term problems of paying on average around $25 billion per year for the next three years,” Dr. Ikram ul Haq, a Lahore-based senior economist, told Arab News.
The new deal came through after Finance Minister Ishaq Dar revised the federal budget the government passed on June 9, 2023. Dar increased Pakistan’s revenue collection target to Rs9.415 trillion ($33 billion) and put total spending at Rs14.480 trillion ($51 billion), increasing the petroleum levy from Rs50 to Rs60 per liter.
Authorities have taken Rs215 billion ($752 million) additional tax measures, cut Rs85 billion expenditures, hiked allocations under the social safety Benazir Income Support Program (BISP) by Rs16 billion, and withdrew amnesty on foreign exchange inflows, while the central bank jacked up policy rate by 1 percent to record high at 22 percent in an emergency meeting.
Economists said the high cost of the IMF bailout package would be borne by the masses rather than the elite.
“The key to success of SBA and next program will be structural reforms that is Waterloo of our elites,” Haq said, adding that “the real victims will be masses who will pay higher indirect taxes and bear high cost of utilities as has happened under previous program.”
For now, the SBA has had a positive impact on local and international investors’ confidence, with Pakistan’s sovereign dollar bond, maturing in 2024, gaining its value as fears of default subsided.
“Significant upward movement in bond prices demonstrates growing optimism among investors regarding Pakistan’s ability to address its economic challenges and implement necessary reforms under the IMF-supported program,” Tahir Abbas, head of research at Arif Habib Limited told Arab News.
Pakistani analysts and currency dealers expect that the country’s capital markets may rally from next week in response to positive the development, which would unlock further funding from bilateral and multilateral partners.
Malik Bostan, president of the Exchange Companies Association of Pakistan (ECAP) hoped the IMF deal would help Pakistan’s national currency regain its lost value.
“The rupee is expected to recover about Rs5 to Rs10 on the opening day of trading and will further strengthen by Rs10 to Rs20 with the inflow of funds,” Bostan told Arab News. “Those hoarding dollars for gains will not suffer losses if they don’t come out to sell.”
IMF’s $3 billion bailout deal will not solve Pakistan’s long-term problems, say experts
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IMF’s $3 billion bailout deal will not solve Pakistan’s long-term problems, say experts
- Economists say IMF agreement provides much-needed space to Pakistani economy, will dampen near-term uncertainty
- Pakistani rupee to recover by Rs10-20 against the US dollar when the IMF funds are received, says currency dealer
Pakistan’s national airline concludes month-long post-Hajj flight operation
- Pakistan International Airlines’ final post-Hajj flight arrived in Islamabad from Madinah, says airline
- PIA says repatriated over 41,500 pilgrims in total since June 10 using Boeing 777, Airbus A320 aircraft
KARACHI: Pakistan’s national flag carrier announced concluding its month-long post-Hajj flight operation on Thursday, saying it had repatriated 41,500 pilgrims since June 10 from Saudi Arabia.
Pakistan concluded its 33-day pre-Hajj flight operation in May, transporting more than 115,000 pilgrims to Saudi Arabia under both the government and private schemes for the annual Islamic pilgrimage. The Pakistan International Airline (PIA) began its post-Hajj flight operation on June 10.
The final post-Hajj flight operated by PIA arrived in Islamabad from Madinah at 8:30 p.m. on Thursday, the national airline’s spokesperson said in a statement.
“In total, over 41,500 pilgrims were repatriated to Pakistan via 147 flights operated by PIA,” the spokesperson said. “PIA maintained an on-time departure rate of over 90 percent for its Hajj flights.”
The airline said its post-Hajj operation was conducted from Pakistan’s Karachi, Lahore, Islamabad, Quetta, Multan and Peshawar cities. The airline used its Boeing 777 and Airbus A320 aircraft for the operation.
“Pilgrims expressed satisfaction with the arrangements made by PIA,” the airline’s spokesperson said.
Pakistan has already started the registration process for Hajj 2026, with over 313,000 individuals completing the process. Intending pilgrims can register for the annual Islamic pilgrimage next year through the religion ministry’s online portal and 15 designated banks.
Pakistan has extended the deadline to register for Hajj 2026 till July 11.
Awami National Party leader killed as militant violence escalates in northwest Pakistan
- Another person with ANP’s Maulana Zeb Khan shot dead by unidentified militants, says CM Office
- ANP spokesperson Ihsan Ullah pays tribute to Khan, says he spoke out against militants frequently
ISLAMABAD: Two people, including a senior leader of the Awami National Party (ANP), were shot dead by unidentified assailants in Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province on Thursday, the chief minister’s office said.
Maulana Zeb Khan, a leader of the Awami National Party (ANP), was shot dead along with another person in KP’s Bajaur tribal district by unknown persons, the chief minister’s office said. English language newspaper Dawn quoted police as saying that the politician was shot dead in Bajaur’s Shindai Mor while campaigning for a peace parade scheduled for July 13 when he was attacked.
ANP spokesperson Ihsan Ullah paid tribute to Khan, saying he frequently spoke out against militants and was a key member of the party, serving as its central secretary of ulema affairs.
“Two people, including Maulana Khan Zeb, were killed in Bajaur in a firing incident by unidentified assailants,” KP Chief Minister’s Office said in a statement, adding that Chief Minister Ali Amin Gandapur condemned the incident.
The KP chief minister directed authorities to prepare a report on the incident and ordered immediate action against those responsible for Khan’s killing.
The incident takes place amid an alarming surge in militant attacks, especially in KP’s tribal districts such as Bajaur, in recent years. Despite past military operations, recent attacks on security forces, clerics and politicians highlight growing instability in the area.
No group has so far claimed responsibility for the incident. However, suspicion is likely to fall on the Tehreek-e-Taliban Pakistan (TTP) outfit that has launched some of the deadliest attacks targeting law enforcers, politicians and civilians since 2007.
Pakistan says Afghanistan-based militant groups launch attacks inside Pakistani territory, a claim Kabul has strongly denied. Islamabad also blames New Delhi for funding and arming these militant groups, which India also denies.
Pakistan police detain eight Sindh building authority officials after Karachi building collapse
- Twenty-seven people died when dilapidated building in Lyari collapsed last Friday
- Incident exposes issue of unsafe housing in city home to over 20 million people
KARACHI: Eight officials of the Sindh Building Control Authority (SBCA) and the owners of a building that collapsed in Karachi last week have been detained in connection with the incident, Pakistani police said on Thursday.
A five-story residential building, Fotan Mansion, collapsed last Friday around 10 am in the impoverished Lyari neighborhood of Karachi, trapping dozens under the rubble and prompting a large-scale rescue operation. Rescue officials recovered 27 bodies from the rubble after three days.
The collapse of the dilapidated building once again exposed the persistent issue of unsafe and poorly regulated housing in Karachi, Pakistan’s most populous city, which is home to over 20 million people. The rapid urbanization and weak enforcement of building codes have put countless residents at risk.
“We have detained eight officials of the SBCA and the owners of the building in connection with the first information report regarding the building collapse in Lyari,” Senior Superintendent of Police (SSP) City Arif Aziz told Arab News.
The complaint was registered under criminal sections covering public servant misconduct, negligence in building safety, unintentional death, intentional bodily harm and property damage. These offenses carry penalties ranging from fines and short-term imprisonment to financial compensation and long-term jail.
Sindh Chief Minister Murad Ali Shah suspended Director General SBCA Ishaque Khuhro and ordered an inquiry over the incident on Monday.
He also directed the SBCA to carry out safety inspections of all buildings in the city. The Sindh government announced Rs1 million ($3,513) in compensation for the families of the 27 victims.
Many of the building’s occupants were members of the low-income Hindu minority community, and residents estimated that around 40 people were inside when the structure collapsed.
Fotan Mansion had been declared unsafe three years ago, according to the SBCA. This incident is the latest in a series of deadly building collapses in Karachi.
In February 2020, a five-story building in Rizvia Society collapsed, killing at least 27 people. The following month, another residential structure in Gulbahar came down, claiming 16 lives.
In June 2021, a three-story building in Malir collapsed, resulting in four deaths. Just last year, in August, a building collapse in Qur’angi killed at least three people.
Pakistan delegation concludes UAE visit under governance exchange program
- Meetings focused on digital governance, tax reform and service delivery
- Delegation seeks to adopt UAE best practices in innovation, institutional performance
ISLAMABAD: A high-level Pakistani government delegation on Thursday concluded an official visit to the United Arab Emirates as part of a program aimed at sharing knowledge and best practices in governance and public sector modernization.
The delegation, led by Bilal Azhar Kayani, Pakistan’s Minister of State for Finance and Railways and Head of the Prime Minister’s Delivery Unit, participated in the UAE Government’s Experience Exchange Programme (EEP). The initiative is aligned with Pakistani Prime Minister Muhammad Shehbaz Sharif’s wider push for institutional reform and better service delivery across the country’s public sector.
During the visit, the eight-member team held detailed sessions with senior UAE officials to learn about digital governance, tax system modernization, leadership development, and innovation in public service.
“Kayani expressed gratitude to the UAE Government for facilitating valuable knowledge-sharing engagements in areas such as digital governance, public service delivery, and tax system modernization,” the Pakistan Embassy in Abu Dhabi said in an official statement.
On the final day of the program, the Pakistani delegation met senior Emirati officials including Mohammad Al Sharhan, Managing Director of the World Governments Summit, Khalid Ali Al Bustani, Director General of the UAE Federal Tax Authority, Saeed Al Eter, Chair of the UAE Government Media Office, Dr. Waleed Al Ali, Secretary General of The Digital School and Khalfan Belhoul, CEO of Dubai Future Foundation.
The sessions focused on the UAE’s approach to future foresight, media communication, and performance management in governance.
Kayani “underscored Pakistan’s commitment to adopting global best practices in digital governance, efficiency, and public sector competitiveness to enhance service delivery and institutional performance,” the statement added.
The visit builds on a Memorandum of Understanding signed on June 16, 2025, between the UAE Ministry of Cabinet Affairs and Pakistan’s Ministry of Planning, Development and Special Initiatives. The agreement aims to strengthen cooperation in governance excellence and institutional capacity-building.
The UAE is one of Pakistan’s largest trading partners and an important source of foreign remittances, with more than 1.7 million Pakistani expatriates living and working in the Emirates. According to Pakistan’s Bureau of Emigration and Overseas Employment, the UAE is the second-largest destination for Pakistani migrant workers after Saudi Arabia.
In recent years, bilateral trade has grown steadily, reaching nearly $10 billion in 2024, driven by energy imports, textiles, and other goods. Pakistani workers in the UAE sent home over $5 billion in remittances last fiscal year, providing vital foreign exchange for the country’s economy.
The two countries maintain close ties in investment, defense cooperation, and people-to-people exchanges, underpinned by shared commitments to economic development and regional stability.
Pakistan army chief calls visits to US, Gulf, Central Asia ‘successful diplomatic maneuver’
- Munir’s remarks preset rare public statement by military on the country’s high-level diplomatic outreach
- Says meetings with Trump, other US leaders allowed Pakistan to present views on bilateral, regional issues
ISLAMABAD: Pakistan’s army chief, Field Marshal Syed Asim Munir, on Thursday described his recent visits to the United States, Gulf nations and Central Asia as a “successful diplomatic maneuver,” in a rare public statement by the military on the country’s high-level foreign policy engagements.
Munir made the remarks during a closed-door briefing to senior commanders at the 271st Corps Commanders’ Conference, held at the General Headquarters (GHQ) in Rawalpindi, according to a statement issued by the military’s media wing.
In May and June, Prime Minister Shehbaz Sharif, accompanied by senior ministers and Munir, visited Saudi Arabia, the UAE, Turkiye, Iran, and Azerbaijan as part of Islamabad’s broader diplomatic outreach in the wake of its four-day confrontation with India in May and as tensions escalated in the Middle East.
Last month, Munir was also hosted to a unprecedented two-hour-long lunch by US President Donald Trump at the White House, with no civilian leaders present. The two leaders discussed regional conflicts including India-Pakistan and Iran-Israel tensions, as well as economic development, trade, cryptocurrency, critical minerals and IT.
“The COAS shared details of Pakistan’s proactive and successful diplomatic maneuver, including recent visits to Iran, Turkiye, Azerbaijan, KSA and UAE, where the COAS accompanied the honorable prime minister,” the army’s media wing said in a statement.
“Forum was also briefed on the historic and unique visit of the COAS to US, where meetings with top-tier leadership, afforded an opportunity to share firsthand, Pakistan’s objective perspective on bilateral, regional and extra-regional developments.”
According to the ISPR, the commanders’ forum also conducted a “holistic review” of internal and external security dynamics, with particular focus on developments in the Middle East and Iran. It said the growing global trend toward the use of force as a preferred policy tool highlighted the need for “persistent development of self-reliant capabilities, national unity and resolve.”
Pakistan has long accused India of supporting militant groups that carry out attacks inside its Khyber Pakhtunkhwa and Balochistan provinces, an allegation New Delhi denies. The military’s statement said Indian intelligence agencies were continuing to back anti-Pakistan proxies.
“Forum strongly asserted that it is imperative to take decisive and holistic actions at all levels against the Indian-backed and sponsored proxies,” the ISPR said.
Pakistan’s powerful military has ruled the country directly for nearly half of its history and retains significant influence over foreign and security policy, even under civilian governments. In recent weeks, top officials have increasingly described the current governance model as a “hybrid system” in which the military and civilian leaders co-share power.
