KARACHI: Following an International Monetary Fund (IMF) report painting a bleak picture of Pakistan’s economy, the government finds itself torn between the IMF’s demands for a further increase in prices for gas and power, the domestic unrest that will likely arise as a result of meeting those demands, and the economic cost of not receiving the IMF’s bailout package, with Pakistan needing billions of dollars to service its external debt.
“Pakistan is facing an increasingly difficult economic situation, with high fiscal and current account deficits, and low international reserves. This mostly reflects the legacy of an overvalued exchange rate, loose fiscal policy and accommodative monetary policy,” said Harald Finger, head of the IMF staff mission that visited Islamabad from September 27 to October 4, in a statement issued on Friday.
The IMF mission head said that a rapid increase in international oil prices, normalization of US monetary policy, and tightening financial conditions for emerging markets are adding to this difficult picture, suggesting that, as a result, economic growth will likely slow significantly, and inflation will rise.
Finger said: “The team welcomes the policy measures implemented since last December. These include 18 percent cumulative depreciation of the rupee, interest rate increases of cumulatively 275 bps, fiscal consolidation through the budget supplement proposed by the minister of finance, a large increase in gas tariffs closer to cost-recovery levels, and the proposed increase in electricity tariffs.
“Policies should include more exchange-rate flexibility and monetary policy tightening, further fiscal adjustment anchored in a medium-term consolidation strategy, and strengthening the performance of key public enterprises together with further increases in gas and power tariffs,” he continued.
Following the IMF statement, the Pakistan Stock Exchange reacted negatively with the benchmark KSE 100 index nose-diving by 860 points due to slow decision-making on the part of government and a drastic drop in the country’s foreign exchange reserves, which decreased to $8.2 billion.
Senior analyst Ahsan Mehanti told Arab News, “Stock fell sharply on investor fears amid a weekly fall in foreign exchange reserves of $627 million and dismal earnings outlook after the IMF end-of-mission statement, which called for policy measures including a further hike in gas and power tariffs and significant external financing”.
“Slow decision-making (about whether to accept the IMF’s bailout package) is the biggest concern of the market, because delaying the inevitable has its own cost,” Muhammad Sohail, senior equity analyst and CEO of Topline Securities, explained.
“The government is still trying hard to avoid the IMF, due to its harsh terms and conditions, but if, as a last resort, the government goes to the fund, we will have to face political fallout,” Senator Mohsin Aziz, PTI member of the Senate Committee on Finance, Revenue and Economic Affairs, told Arab News.
Professor Hassan Askari, a senior political analyst, said: “If the government goes to the IMF it will be subjected to lot of harsh criticism at home because so far the PTI has been staunchly opposed to the IMF program.”
Former finance minister Dr. Salman Shah said: “If they do not go to the IMF they will be in trouble, and delaying it will come with a certain cost. But If they do go to the IMF, people will have to face inflationary pressure, in which case they may shift some of the blame on to the shoulders of the previous government (as is the norm in Pakistan’s politics).”
As experts forecast another wave of inflation, the IMF advocates protection of some of the more-vulnerable segments of society through the Benazir Income Support Program.
Junaid Esmail Makda, president of the Karachi Chamber of Commerce and Industry,said: “An increase in gas tariffs will ultimately result in (increasing) inflation, which will terribly affect the lives of the poor.”
Senator Mohsin Aziz said: “In the post-IMF program period, the government would try to increase its revenue income so that vulnerable people and sectors could be compensated through subsidies and other means.”
Though no official was available to comment on the decision to approach the IMF, local media reported that the team negotiating with the IMF mission has told Prime Minister Imran Khan that the IMF bailout package is “the only viable option” and the PM is expected to give his consent within days.
IMF calls for Pakistan to make further power price hikes
IMF calls for Pakistan to make further power price hikes
- Pakistan is facing “increasingly difficult” economic situation, IMF says
- Government braced for harsh criticism and political fallout, Senator Mohsin Aziz
Pakistan forms task force against Islamabad protesters as Imran Khan’s party seeks action against ministers
- Task force will be headed by the interior minister and will identify those who ‘spread violence’ in the capital
- PTI’s information secretary shares 12 names, saying the party has evidence they were killed in Islamabad
ISLAMABAD: Prime Minister Shehbaz Sharif on Friday formed a task force to identify and prosecute individuals involved in last week’s protest in Islamabad, as the opposition Pakistan Tehreek-e-Insaf (PTI) claimed 12 supporters were killed in clashes and demanded police cases against top government ministers.
The PTI protest began on November 24 as the party supporters demanded the release of jailed leader, former premier Imran Khan, who has been incarcerated for over a year.
The government had warned against demonstrations in the federal capital, but protesters gathered in defiance, resulting in a crackdown against them. While PTI accuses the government of using live ammunition to kill and seriously injure demonstrators, officials claim PTI activists fired on security forces, killing five personnel.
The task force, headed by Interior Minister Mohsin Naqvi, was announced as Sharif chaired a high-level security meeting, with Chief of Army Staff General Asim Munir in attendance, in Islamabad.
“The task force will ensure those responsible for spreading chaos and violence on November 24 are identified and brought to justice in accordance with the law,” the PM Office said in the statement.
Meanwhile, PTI’s Secretary Information Sheikh Waqas Akram, speaking at a news conference in Peshawar, alleged that the government had indiscriminately targeted protesters, sharing names of 12 individuals the party said were killed.
He said videos and evidence from the protest site near the parliament building in Islamabad corroborated the party claims, adding that the actual death toll could be higher as many were missing or critically injured.
“We strongly demand police complaints be lodged against the prime minister, the interior minister and information minister,” he said. “Without this, public unrest will continue to grow.”
“We urge the judiciary to step forward and ensure these killers are brought to justice,” he added.
The government has also announced plans to create a federal riot control force, saying it would be equipped with international-standard resources and skills to prevent such protests in the future.
Pakistan, China hold joint military drill amid Beijing’s concerns over attacks on nationals
- Warrior VIII, which began on November 19, aims to bolster counterterrorism capabilities
- Pakistan’s army chief interacted with the participants of the exercise and praised their morale
ISLAMABAD: Chief of Army Staff (COAS) General Asim Munir on Friday visited the National Counter Terrorism Center (NCTC) in Pabbi, located in the Gujrat division of Punjab province, to observe a joint counterterrorism exercise between the Pakistan Army and the People’s Liberation Army (PLA) of China, said an official statement.
The three-week “Warrior VIII” exercise, which began on November 19, is the eighth iteration of bilateral training aimed at bolstering counterterrorism capabilities and enhancing military cooperation.
The exercise comes as China’s security concerns in Pakistan have grown following a spate of attacks targeting Chinese nationals working on dozens of lucrative projects in the country.
“The COAS was briefed on the scope and conduct of the exercise,” the military’s media wing, Inter-Services Public Relations (ISPR), said. “He also interacted with the participants of the exercise.”
Thousands of Chinese nationals have been working on the multibillion-dollar China-Pakistan Economic Corridor (CPEC) for nearly a decade, with several of them being targeted by different militant groups operating in Pakistan.
Earlier this year, in March, a suicide bomber attacked a convoy near Besham in Khyber Pakhtunkhwa, killing five Chinese engineers. A few months later, in October, a bombing near Karachi airport targeted Chinese workers ahead of the Shanghai Cooperation Organization (SCO) Summit in Islamabad.
Beijing has voiced concerns over the safety of its citizens working in Pakistan and has reportedly proposed a joint security mechanism.
However, the foreign office said this month the two countries have a “robust dialogue and cooperation” on a range of issues, including counterterrorism and the security of Chinese nationals in the country.
It also expressed the government’s resolve to work with Chinese authorities to ensure the safety and security of their nationals, as well as their projects and investments.
According to Voice of America, Warrior VIII is the first joint counterterrorism exercise between the two countries in five years.
The ISPR said General Munir also praised the professionalism and high morale of the officers and soldiers participating in the joint military exercise.
European aviation safety agency lifts Pakistan airline ban — minister
- The development will revive PIA’s flights to Europe, strengthen the government’s privatization drive
- Pakistan’s Airblue has secured Third Country Operator authorization to fly to European destinations
KARACHI: The European Aviation Safety Agency (EASA) has lifted a ban on Pakistan International Airlines (PIA) flights after a span of four years, Defense and Aviation Minister Khawaja Muhammad Asif announced Friday, commending all the relevant officials who made the breakthrough possible.
The ban on PIA flights was imposed in 2020 after a crash in Karachi killed 97 people, followed by a former Pakistani aviation minister’s statement claiming that nearly 40 percent of local pilots held “dubious” licenses.
This statement raised global concerns about safety oversight, leading to the grounding of PIA’s European operations.
The suspension added to PIA’s financial troubles, as the debt-ridden national carrier continued to incur losses amid its struggle to recover from a tarnished reputation. The government also faced difficulties privatizing the airline, a condition set by the International Monetary Fund (IMF) during recent loan negotiations, due to its precarious financial situation.
“It is a momentous day to announce that the European Commission and European Aviation Safety Agency (EASA) has lifted the suspension on PIA flights to Europe,” the aviation minister wrote in a social media post.
He also announced that the decision granted Third Country Operator (TCO) authorization to another Pakistani airline, Airblue, marking a significant development for the aviation sector.
TCO authorization granted by EASA allows non-European airlines to operate commercial flights into, within or out of European Union airspace.
Airblue, Pakistan’s second-largest airline, operates domestic and regional routes and is expected to explore European operations following the TCO authorization.
Responding to the development, PIA lauded the lifting of the ban as a testament to its adherence to international safety standards.
“This milestone ensures that the entire nation can once again travel directly to European destinations with their national airline,” the airline said in a statement, adding it had worked tirelessly over the past four years to meet EASA’s safety requirements.
“The PIA administration will remain fully compliant with EASA and its rules and regulations,” it added.
Asif credited the lifting of the suspension to reforms in Pakistan’s Civil Aviation Authority (PCAA), which he said were aimed at aligning the regulator with international standards.
“I am grateful to the European Commission and EASA for conducting a transparent process and our commitment to ensuring aviation safety in Pakistan,” he said in the social media message.
The development is expected to help revive PIA’s European operations and strengthen the government’s privatization efforts by improving the airline’s appeal to potential investors.
Pakistan receives 38,000 Hajj applications in 10 days
- Total number of applications received so far is 11,000 more than during the corresponding period last year
- Pakistan has a Hajj quota of 179,210, evenly split between the government and private tour operators
ISLAMABAD: Pakistan’s Ministry of Religious Affairs said on Friday that 38,000 Hajj applications had been received in the first 10 days of the submission period, 11,000 more than during the same period last year.
The surge comes as Pakistan prepares to send 179,210 pilgrims for the annual Islamic pilgrimage in 2025, under a quota evenly divided between government and private Hajj schemes.
“By the tenth day, 38,000 Hajj applications have been received,” a ministry said in a statement, adding that designated banks would continue accepting applications over the weekend. The final deadline for submissions is Dec. 3.
Pilgrims under the regular Hajj scheme can secure their booking with an initial payment of Rs200,000 ($719), according to the statement.
Pakistan has steadily improved facilities for pilgrims in recent years.
One key initiative is the Makkah Route Initiative, which streamlines immigration processes by enabling pilgrims to complete formalities at their departure airports.
Initially tested in Islamabad in 2019, the program was later expanded to Karachi, benefitting tens of thousands of travelers.
Efforts have also included the launch of a mobile application, Pak Hajj 2025, to provide pilgrims with essential updates, flight details and navigation assistance in Saudi Arabia.
Hajj, one of the five pillars of Islam, attracts millions of Muslims annually to Makkah, with Pakistan consistently being among the largest contributors of pilgrims.
ICC talks continue on fate of Pakistan Champions Trophy
- Event’s fate has been hanging in the balance since India declined to visit Pakistan
- ICC meeting adjourned without a decision but will reconvene ‘in the next few days’
KARACHI: The International Cricket Council (ICC) said talks were continuing to settle uncertainty around next year’s Champions Trophy, sources told AFP, after India refused to travel to host nation Pakistan.
The event’s fate has been hanging in the balance since earlier this month, when the ICC said India had declined to visit Pakistan for the eight-team tournament.
The nuclear-armed neighbors have fought three wars since being carved out of the subcontinent’s partition in 1947 and that rivalry is often reflected on the cricket field.
A meeting by the Dubai-headquartered ICC was held briefly on Friday but adjourned without a decision, according to several sources with knowledge of the talks who were not authorized to speak to media.
“All parties continue to work toward a positive resolution,” said one source, adding that “it is expected that the board will reconvene in the next few days.”
The Pakistan Cricket Board has previously ruled out proposals allowing India to play in a neutral third country, insisting the full schedule from February 19 to March 9 must be staged on their turf.
Another source said the “Pakistani stance remains the same” following Friday’s brief meeting.
