KARACHI: Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to extend the tenure of their $7.7 billion short term deposits, a move that will ensure long term forex stability of the South Asian nation, Dr. Abdul Hafeez Shaikh, the prime minister’s adviser on finance and revenue, told Arab News in an exclusive interview.
“Last year, when Pakistan was going through the worst balance of payment (BoP) crisis in our history, we were provided financial support by our brotherly countries,” Shaikh said on Monday.
Pakistan’s friendly countries were approached by the government of Prime Minister Imran Khan soon after assuming the office in 2018 as the country’s current account deficit reached $20 billion.
Responding to Pakistan’s call, Saudi Arabia deposited $3 billion while the UAE and China deposited $2 billion and $2.2 billion, respectively. Qatar also contributed by depositing $0.5 billion with Pakistan’s central bank.
“The $7.7 billion secured from the bilateral arrangements provided the much needed balance of payment support to Pakistan,” he added.
“These are short term deposits placed with the central bank in Pakistan at concessional rates,” the PM’s adviser said, adding: “We are in talks with our development partners to move these deposits toward longer tenors.”
Economists say these deposits provided a lifeline to the country’s economy that had higher imports and lower exports.
“The balance of payment support oxygenated the country’s economy that was much need for its survival. The support helped Pakistan not to default on its foreign payment obligations,” Muzzamil Aslam, senior economist, who is familiar with the developments, told Arab News.
Pakistan’s current account deficit (CAD) was $20 billion in 2018 which declined to $13.43 billion during the last fiscal year. Its further decline is also projected for the current fiscal year (2019-20).
“CAD is projected to decline to $4b [or 1.7 percent of the GDP] in the current fiscal year, compared to $20b when the government took office in 2018,” Shaikh said.
The major balance of payment support came from Saudi Arabia which provided $6 billion in financial assistance to Pakistan, with $3 billion in foreign currency support and $3 billion worth of oil on deferred payments. The agreement was signed during the visit of Prime Minister Imran Khan to the Kingdom in October 2018.
Economists say when Pakistan approached the International Monetary Fund (IMF) for the bailout program, the United States had expressed concerns that the money could be used to pay off debts, especially those taken from China.
“After we started getting the IMF assistance, the fund imposed a condition during the first review of the program to roll over these loans instead of paying them back. This was because the US had misgivings that Pakistan will pay the Chinese debt with the IMF money,” Aslam said.
However, the IMF acknowledged in April that “Bilateral creditors have maintained their exposure in line with debt sustainability objectives of the EFF [Extended Fund Facility].”
China maintained their exposure by renewing $2 billion bilateral deposits in March. Saudi Arabia also refinanced $3 billion BoP support loans that matured in November-January, while the UAE rolled over $1 billion BoP support loans in March. The oil facility with Saudi Arabia – worth $3.2 billion – was activated in August 2019 and has also been providing support to the balance of payments, according to the IMF documents.
Instead of frequent rollovers now, the government wants to convert these short term deposits into long tenors. “The IMF is behind this strategy,” Aslam informed. “The conversion will impact the status of these deposits in a way that loan rates will be decided in line with the international benchmark which may be LIBOR+2-3 percent.”
Economists say the conversion of these deposits will positively impact the economy of the country since Pakistan will get some breathing space and an opportunity to improve its overall financial condition. “It will provide long term forex stability. Otherwise, we will be under pressure to pay back $7.7 billion,” Aslam said.
Pakistan seeks Arab creditors, China to convert $7.7 bn into long term loans — Hafeez Shaikh
https://arab.news/ze345
Pakistan seeks Arab creditors, China to convert $7.7 bn into long term loans — Hafeez Shaikh
- Pakistan received $3 billion BoP support from Saudi Arabia, $2 billion from the UAE and $2.2 from China
- Conversion of short term deposit will provide long term financial stability to the country, say experts
Pakistan name Azhar Mahmood as latest red-ball head coach
- Azhar Mahmood becomes fourth man to be appointed to the post in last 18 months
- Pakistan will host South Africa in their first series of latest WTC cycle in October
KARACHI: Pakistan on Monday named former all-rounder Azhar Mahmood interim head coach of the Test side, the fourth man to take the post in the last 18 months.
The 50-year-old will remain in the position until January, the Pakistan Cricket Board (PCB) said.
As a pace bowling all-rounder Mahmood played 143 one-day internationals and 21 Tests for Pakistan, and has been serving as assistant coach since last year.
“The PCB announces Mahmood as the acting red-ball head coach of the Pakistan men’s team,” said a PCB press release.
Mahmood replaces Aaqib Javed, who was interim head coach for the Test series in South Africa in December-January and at home against the West Indies.
Javed left after Pakistan lost all four Tests and finished ninth and last in the third cycle of the World Test Championship.
Javed took over from former Australia pacer Jason Gillespie, who quit six months into his stint in December 2024 after differences with the PCB.
Before Gillespie, former Pakistan all-rounder Mohammad Hafeez was team director and oversaw a 3-0 Test defeat in Australia.
Monday’s appointment is part of a series of changes the PCB has taken to improve the performances of the national team after a poor two years.
Last month, New Zealand’s Mike Hesson took over as white-ball head coach for two years.
Pakistan will host South Africa in their first series of the latest WTC cycle in October this year and then Sri Lanka in December-January.
Pakistan’s inflation rate to remain within 3-4% range in June — finance ministry
- Higher remittances and exports to keep current account in surplus, report say
- Topline Securities sees FY25 inflation averaging 4.6%, expects no major rate changes
ISLAMABAD: Pakistan’s inflation is expected to remain between 3–4% in June, the country’s finance ministry said in its monthly economic outlook report on Monday, reflecting a sharp decline from the record highs of 2023, when inflation peaked at 38% amid political turmoil and external account pressure.
Annual inflation rose to 3.5% in May 2025, up from just 0.3% in April, according to official data from the Pakistan Bureau of Statistics. However, it remains far below the 38% peak recorded in May 2023 amid political turmoil and external account pressure.
“Inflation is expected to remain within the range of 3.0–4.0 percent for June 2025,” the finance ministry said, citing stable food supplies and fiscal discipline.
The ministry said recent economic indicators showed signs of recovery, with increased lending to the private sector suggesting a pickup in production and business confidence. On the external front, it projected that higher remittances from overseas workers and a modest uptick in exports would help maintain a current account surplus for the full fiscal year ending June 30, 2025.
From July 2024 to April 2025, federal revenue growth outpaced expenditures, which the ministry attributed to the effectiveness of its fiscal reform measures. Net federal receipts grew by 44.4% to Rs8,124.2 billion, up from Rs5,627.5 billion a year earlier.
“The rise in revenues is primarily contributed by 68.1% growth in non-tax collections,” the report said. “Similarly, tax collection witnessed a significant increase, as in Jul-May FY2025, it grew by 25.9% to Rs10,233.9 billion from Rs8,125.7 billion last year.”
Breakdowns of tax categories showed a 33.8% increase in federal excise duty, a 27% rise in direct taxes, a 26.5% jump in sales tax, and a 16.3% increase in customs duties.
Independent analysts say the macroeconomic outlook is improving, though risks remain.
Brokerage house Topline Securities estimated on Monday that June 2025 inflation will clock in at around 3.2%, compared to 12.6% in the same month last year. This would bring average inflation for FY2025 to 4.6%, a significant drop from 23.9% in FY2024.
On a month-on-month basis, Topline expects a slight 0.2% increase in overall prices, driven largely by a 0.4% rise in the housing index due to fuel cost adjustments in electricity bills. However, food prices are forecast to decline by 0.5%, led by falling poultry prices.
Within the sensitive price index (SPI) basket, sharp price increases were observed in tomatoes (59.3%), potatoes (26.4%), eggs (7.4%), fresh fruits (5.7%) and onions (5.0%), while notable declines were seen in chicken (-32.5%), fresh vegetables (-12.2%), LPG (-6.6%), vegetable ghee (-0.4%), and cooking oil (-0.4%).
Topline said the recently announced FY2026 federal budget was broadly non-inflationary, with minimal changes to the tax structure and no major new levies, in line with IMF-supported fiscal goals. However, it cautioned that the government’s move to raise fixed charges for domestic gas consumers could push inflation slightly higher in coming months.
With gas having a weight of about 1.1% in the urban consumer price index, the brokerage estimated the hike could result in a 23% month-on-month increase in the gas index, translating to a 0.85 percentage point uptick in headline inflation.
Looking ahead, Topline projected that average inflation for FY2026 would hover around 5.4%, assuming no major shocks to the domestic supply chain or global commodity prices. It also expects the central bank to keep interest rates steady, noting that the full impact of recent rate cuts, totaling 1,100 basis points, has yet to fully transmit through the economy.
Pakistan urges world to stop Israel’s ‘murderous course,’ reaffirms support for Palestinian state
- Israel’s retaliatory campaign against Hamas in Gaza has killed at least 56,412 people since October 7, 2023
- Ishaq Dar criticizes Israel’s “wanton killing” of women and children, targeting aid workers and blocking Gaza aid
ISLAMABAD: Pakistan’s Deputy Prime Minister Ishaq Dar on Monday urged the international community to mobilize and stop Israel from its “murderous course” and military operations in Gaza, reiterating Islamabad’s firm support for an independent Palestinian state.
After claiming victory in a 12-day war against Iran that ended with a ceasefire last Tuesday, the Israeli military said it would refocus on its offensive in Gaza, where Hamas still holds Israeli hostages.
Israel’s retaliatory military campaign against Hamas has killed at least 56,412 people in Gaza since October 2023. Most of the dead are civilians, according to the Hamas-run territory’s health ministry. The United Nations considers these figures to be reliable.
“The international community must mobilize to stop Israel from its murderous course and persuade it to pursue a path of reason,” Dar said during his speech at the Institute of Strategic Studies Islamabad.
“Palestinians must be granted their inalienable right to self-determination,” he added.
He condemned Israel’s “wanton killing of women and children,” blaming the Jewish state for using starvation as “an instrument of war” in the densely populated Gaza territory, targeting humanitarian workers and destroying homes, schools, hospitals and critical infrastructure there.
Dar, who also serves as Pakistan’s foreign minister, said Islamabad reiterates its support for the establishment of a viable and independent Palestinian state with pre-1967 borders and Al-Quds Al-Sharif as its capital.
The Pakistani deputy premier condemned Israel and the United States for attacking key Iranian nuclear facilities earlier this month, saying they violated the United Nations Charter, international law and put regional peace in danger.
He welcomed the Iran-Israel ceasefire announcement, urging all parties to resolve their disputes peacefully through dialogue and diplomacy.
Pakistan finmin to discuss global finance challenges at international conference in Spain this week
- Fourth International Conference on Financing for Development will be held in Seville, Spain, from July 1-3
- Muhammad Aurangzeb to meet global policymakers, speak on debt transformation and financial cooperation
KARACHI: Pakistan’s Finance Minister Muhammad Aurangzeb will discuss global finance challenges and meet policymakers from other countries at the Fourth International Conference on Financing for Development (FFD4) being held in Spain this week, the finance ministry said on Monday.
The conference, which is being held from July 1 to 3 in Seville, will bring together leaders, policymakers and international development experts to explore innovative and sustainable financing strategies to accelerate progress toward Sustainable Development Goals (SDGs), particularly for developing and emerging economies, the finance ministry said.
Aurangzeb is scheduled to take part in several key conferences and high-level side events, where he will present Pakistan’s take on the prevalent global finance issues and greater cooperation among nations.
“The Finance Minister’s participation at FFD4 underscores Pakistan’s commitment to promoting innovative financing solutions, strengthening international cooperation, and enhancing the country’s voice in global development discourse,” the finance ministry said.
Sharing details of the finance minister’s engagements at the conference, the ministry said he will co-chair the multi-stakeholder roundtable on ‘Leveraging Private Business and Finance’ on July 1 and deliver a keynote address at the International Business Forum Policy Dialogue on ‘Accelerating EMDEs Investment: The Role of Credit Ratings.’
The minister is also scheduled to address the General Debate of the conference and participate in the roundtable discussion on ‘Revitalizing International Development Cooperation,’ the ministry said.
It added that as part of a UNICEF-hosted side event, Aurangzeb will speak on ‘Driving Capital Towards Children and Young People: A Dialogue on Innovative and Sustainable Financing for Children.’
It said the finance minister will also attend and speak as the chief guest at a special session titled ‘Swapping Out Debt for Development: The DCS Financing Approach,’ where he will highlight Pakistan’s perspectives on debt transformation and the potential of deposit protection mechanisms to support development finance.
He will also participate as a panelist at the International Business Forum’s side event on ‘Scaling Up SME Finance,’ focusing on enhanced financial inclusion for small and medium-sized enterprises, the ministry added.
“In addition to his conference engagements, the Finance Minister will hold bilateral meetings with key international figures, including Mr. John W.H. Denton AO, Secretary-General of the International Chamber of Commerce, and H.E. Mr. Steven Collet, Vice Minister for Development of the Kingdom of the Netherlands,” the finance ministry said.
Pakistan has been navigating a tricky path to recovery from a prolonged macroeconomic crisis that has weakened its foreign exchange reserves, drained its resources and triggered a balance of payments crisis.
The government says it is committed to the reforms course, which includes privatizing state-owned enterprises incurring losses, widening the tax base and improving its energy sector.
Pakistan says two ‘dangerous’ fugitives wanted in several cases arrested in Spain
- Nawazish Ali Hanjra is wanted in 23 cases on charges ranging from “terrorism” to murder and kidnapping for ransom
- Pakistan says has demanded the arrest and extradition of 38 fugitives from Spain via Interpol’s Red Notices for years
ISLAMABAD: Spanish authorities have arrested two “dangerous” fugitives wanted in several cases such as murder, “terrorism” and kidnapping for ransom, Pakistan’s state-run media reported recently, with Islamabad hoping other absconders in the European country would also be apprehended and extradited soon.
As per details shared by the state-run Associated Press of Pakistan (APP), Nawazish Ali Hanjra is wanted in 23 cases including “terrorism,” murder and kidnapping for ransom while Haroon Iqbal, the other suspect, is wanted in a separate case. These two were arrested in Spain on Interpol’s Red Notices, APP said.
Pakistan’s Minister of State for Interior Tallal Chaudry, during his recent visit to Spain, met Spanish Interior Minister Fernando Grande-Marlaska to demand the arrest and extradition of the two suspects, APP said. The Spanish interior minister acted swiftly and issued directives to authorities in this regard.
“This is a major step forward in our commitment to justice,” Chaudry was quoted as saying by APP on Sunday. “I am grateful to the Spanish authorities for understanding the gravity of the situation and taking swift action. We hope to see the remaining fugitives arrested and extradited soon.”
APP said Islamabad has demanded the arrest and extradition of 38 fugitives from Spain via Interpol’s Red Notices for years. It said these individuals managed to evade justice for years, exploiting legal loopholes and the lack of coordination between international enforcement agencies.
The state-run media said legal proceedings are underway to facilitate Hanjra’s and Iqbal’s extradition to Pakistan, where they will face trial under the country’s anti-terror and criminal laws.
“The development is being hailed as a milestone in international law enforcement cooperation and a sign that Pakistan is intensifying efforts to bring back criminals who have found refuge abroad,” APP said.
