Pakistan inflation likely to hit all-time high as government takes measures to revive IMF program

This picture taken on January 30, 2023 shows daily wage labourers sitting along a road as they wait to be hired for day jobs in Pakistan's port city of Karachi. (AFP)
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Updated 05 February 2023
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Pakistan inflation likely to hit all-time high as government takes measures to revive IMF program

  • Currency depreciation, fuel price surge, electricity and gas tariff hikes will push inflation up by over 30% next month
  • IMF mission will stay in Pakistan for 10 days to continue discussions on stalled $7 billion loan program signed in 2019

KARACHI: The Pakistan government’s measures to raise petroleum prices and devalue the national currency ahead of the arrival of the International Monetary Fund (IMF) mission today, Tuesday, are expected to push the inflation rate to an all-time high of over 30 percent, particularly with electricity and gas tariff hikes around the corner, economists and experts said. 

An IMF mission is scheduled to visit Islamabad from January 31 to February 9, 2023, for discussions on the 9th review of a $7 billion loan program signed in 2019. The mission will examine Pakistan’s policies to restore domestic and external sustainability, including strengthening the country’s fiscal position with durable measures while supporting those affected by devastating floods last year.

The IMF mission also plans to revitalize the power sector and reverse the accumulation of circular debt, reestablish proper functioning of the foreign exchange market and clear the forex shortage, according to the IMF representative in Pakistan, Esther Perez Ruiz. 

Economists and analysts said Pakistan had taken concrete steps to secure the IMF loan.

“Pakistan has removed [the] cap on the currency exchange rate and has also increased the prices of petroleum products as per the demand of [the] IMF,” Dr. Vaqar Ahmed, Joint Executive Director at Sustainable Development Policy Institute (SDPI), told Arab News. 




This picture taken on January 30, 2023, shows resident Saleem Qureshi (C) filling petrol in his motorcycle at a gasoline station in Pakistan's port city of Karachi. (AFP)

Most analysts agreed the next step would be to increase the tariff on electricity and gas, and another price hike of petroleum prices was also on the cards in February. The combined impact of the measures would be inflationary pressure, they said. 

“Inflation for the next two months is forecasted to be substantially higher with the petroleum price hike. We expect that the inflation in the next quarter will be above 25 percent, not below this level,” Ahmed said.

Tahir Abbas, Head of Research at Arif Habib Limited, agreed, saying the impact of the current and upcoming measures to win IMF approval for the 9th review would be more than 30 percent in inflationary terms:

“We expect that the inflation rate of February 2023 will be around 33 percent due to the fuel rate increment and currency depreciation.”

Inflation was recorded at 24.5 percent on a year-on-year basis in December 2022, as compared to 12.3 percent in December 2021.




This picture taken on January 30, 2023, shows residents buying groceries at a market in Pakistan's port city of Karachi. (AFP)

Meanwhile, the national currency of Pakistan has depreciated by 14.37 percent or Rs38.74 against the United State dollar during the last three trading sessions. The currency closed at Rs269.63 on Monday and has so far depreciated by 16.02 percent since January 2023. 

Pakistan’s foreign exchange reserves have dropped to just $3.7 billion, not even enough to cover import payments for a single month. Pakistan on average has imported goods valued at $5 billion per month during the last six months.

Pakistan expects the disbursement of $1.1 billion from the IMF after the 9th review and inflows from other multilateral donors and friendly countries after a successful review of the fund program. 

Ahmed said further measures would be required to take the IMF into confidence, including imposing Rs300 billion worth of taxes through a presidential ordinance. 

However, he said the government would try to negotiate with the fund to lower this number: “Pakistan will try to negotiate a reduced magnitude of taxes and energy tariffs.”

A successful IMF visit is critical for Pakistan but Pakistani analysts said the government was also facing a lot of internal pressures against the IMF proposals. On Sunday Pakistan jacked up petroleum prices by Rs35 per liter, which will increase freight charges in the country.

“There is no other option but to raise the freight charges in conditions that have forced us to drive around 50 percent of our fleet off the roads,” Muhammad Yousuf Khan, Chairman, Pakistan Transport Association, told Arab News. “We will increase freight charges by around 33 percent from Rs6,000 to around Rs8,000 per ton.”

Transporters said without shifting the monetary burden of fuel price hikes onto end consumers, a viable business model would not be possible. 

“Under the current economic situation, we are not in a position to stage protests or go on strikes because high inflation has already taken a major share of our profits,” Israr Ahmed Shinwari, spokesman of the All Pakistan Oil Tankers Owners Association, told Arab News. 


Pakistani security forces kill three militants in intelligence-based operation in northwest

Updated 08 March 2025
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Pakistani security forces kill three militants in intelligence-based operation in northwest

  • The operation in Tank came just days after a twin suicide bombing in Bannu this week
  • Military’s media wing says weapons and ammunition were recovered from the slain militants

KARACHI: Pakistani security forces killed three militants in an intelligence-based operation in the northwestern Tank district on Saturday, the military’s media wing, Inter-Services Public Relations (ISPR), said in a statement.
The operation in Khyber Pakhtunkhwa province occurred days after a twin suicide bombing killed at least 18 people in nearby Bannu. The region has experienced increased militant violence since a ceasefire between the government and the banned Tehreek-e-Taliban Pakistan (TTP) collapsed in late 2022.
Pakistan refers to TTP fighters as “khawarij,” a term historically describing an extremist sect in early Islam known for rebelling against authority and declaring other Muslims apostates.
“On 08 March 2025, Security Forces conducted an intelligence-based operation in Tank District on reported presence of khawarij,” the ISPR said. “During the conduct of operation, own troops effectively engaged the khawarij location, as a result of which, three khawarij were sent to hell.”
The military recovered weapons and ammunition from the slain militants, who were allegedly involved in numerous attacks against security forces and civilians.
The ISPR informed a “sanitization operation” was underway to eliminate any remaining militants in the area, expressing the resolve of the security forces to eradicate extremist violence from the country.


UK jails man for smuggling firearm parts from Pakistan in hidden car shipment

Updated 08 March 2025
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UK jails man for smuggling firearm parts from Pakistan in hidden car shipment

  • Yasir Khan pleaded guilty to smuggling Glock components hidden in a 1976 Datsun Sunny
  • Khan is suspected of a similar importation in Nov. 2023 by the National Crime Agency

ISLAMABAD: A 40-year-old man who attempted to smuggle 72 firearm parts in a car shipped from Pakistan to the United Kingdom was sentenced to eight years in prison on Friday, the London-based National Crime Agency (NCA) said in a statement.
Yasir Khan pleaded guilty to the crime after an NCA investigation proved he was behind an attempt to smuggle 36 top slides and 36 barrels for 9mm Glock self-loading pistols in a 1976 Datsun Sunny.
The NCA operates across the UK, tackling serious and organized crime, including human trafficking, drug and arms smuggling and financial offenses. It works closely with other government agencies, including Border Force, to combat illicit trade and transnational crime.
The NCA statement said the haul was expertly hidden in the vehicle.
“Working with our law enforcement partners at home and abroad, preventing illegal firearms from reaching the streets of the UK is a key priority for the NCA,” David Phillips, a senior investigating officer with the agency, said while commenting on the development.
“The NCA and Border Force have prevented this huge array of component parts from entering the criminal marketplace and being used to produce lethal firearms for organized crime groups.”
The illegal firearm parts were concealed beneath the windscreen, behind the engine block and inside the fuel tank. They were discovered by Border Force officers during a search at London Gateway Port on July 7, 2024.
NCA officers launched an investigation, and Khan, who claimed to be a car dealer, was arrested by the agency’s Armed Operations Unit on July 12 in Birmingham’s Jewlery Quarter.
Khan appeared in Birmingham Crown Court on Friday and was sentenced after pleading guilty to smuggling firearms.
The NCA statement said investigating officers discovered voice notes on his phone, providing evidence of his contact with a supplier in Pakistan who had access to manufacturing firearm components.
The supplier had invited Khan to visit “the factory” in summer 2023.
Khan is suspected of a similar importation in November 2023. Mobile phone voice notes and videos showed him struggling with ammunition jamming in firearms after they were constructed and test-fired.
Evidence also revealed that during 2023, Khan purchased several deactivated firearms, which he is believed to have converted back into fully functional lethal weapons.


Pakistan’s deputy PM urges OIC to reject Palestinian displacement, calls it a ‘red line’

Updated 08 March 2025
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Pakistan’s deputy PM urges OIC to reject Palestinian displacement, calls it a ‘red line’

  • Ishaq Dar says history will not judge Muslim nations by their words but by their actions on the Palestine issue
  • He condemns Benjamin Netanyahu’s recent suggestion that a Palestinian state be established in Saudi Arabia

ISLAMABAD: Pakistan’s Deputy Prime Minister Ishaq Dar on Saturday condemned plans to forcibly relocate Palestinians from their homeland, labeling such actions a “red line” and urging the Organization of Islamic Cooperation (OIC) to take decisive measures to hold Israel accountable for its actions in Gaza and the West Bank.
Dar, who also serves as the country’s foreign minister, is currently in Saudi Arabia, having arrived on Thursday to participate in the OIC foreign ministers’ session on Palestine held in the port city of Jeddah.
The session was convened in response to US President Donald Trump’s proposal to permanently displace over 2 million Palestinians from Gaza, with plans to transform the area into an international beach resort.
This was widely condemned by majority-Muslim nations and international rights organizations, with Arab leaders endorsing an Egyptian-led reconstruction plan for Gaza, valued at $53 billion, which aims to prevent Palestinian displacement.
“The Muslim Ummah must make it unequivocally clear: any attempt to forcibly relocate the Palestinian people, whether from Gaza or the West Bank, is ethnic cleansing and a war crime under international law,” Dar asserted during his address at the OIC special session.
“The OIC must categorically reject any proposal that seeks to eject the Palestinians from their own homeland,” he added. “No external force has the right to dictate their future to the Palestinians. They must determine their own future, through an exercise of self-determination.”

This handout photo shows Pakistan Foreign Minister and Deputy Prime Minister Ishaq Dar (center) participating in the Organization of Islamic Cooperation foreign ministers’ session on Palestine, in Jeddah, Saudi Arabia on March 8, 2025. (Photo courtesy: Handout/MOFA)

The Pakistani deputy prime minister emphasized that the notion of Palestinian displacement “must be recognized as a red line,” urging the OIC to collectively oppose and obstruct any such move.
“This is a defining moment for the Muslim Ummah,” he continued. “History will not judge us by our words but by our actions... The OIC must rise to this challenge with unity, resolve and purpose. Another Nakba cannot and must not be allowed to happen.”
Dar condemned Israel for obstructing humanitarian aid to Gaza and warned that sustainable peace cannot be achieved as long as Israeli military operations, settler violence and illegal land annexations persist.
He called for the revival of a credible and irreversible political process toward a two-state solution, leading to the establishment of an independent and sovereign Palestine.
“The OIC must mobilize its collective influence to press for the recognition of the state of Palestine as a full member of the United Nations,” he urged.
Dar also criticized Israeli Prime Minister Benjamin Netanyahu’s recent suggestion that a Palestinian state be established in Saudi Arabia.
“This is an insult to the entire Muslim Ummah,” he said. “Pakistan expresses its full solidarity with the Kingdom of Saudi Arabia and commends its steadfast support for the Palestinian cause.”


US warns nationals against travel to Pakistan, citing ‘terrorism’ and conflict risks

Updated 08 March 2025
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US warns nationals against travel to Pakistan, citing ‘terrorism’ and conflict risks

  • The advisory particularly stops US citizens from traveling to KP, Balochistan and areas near the Line of Control
  • It asks US government personnel to obtain special authorization before going out of the major urban centers

ISLAMABAD: The United States Department of State issued a travel advisory to Pakistan on Friday, urging its citizens to reconsider travel to the South Asian country “due to terrorism and the potential for armed conflict.”
The advisory comes days after President Donald Trump told the US Congress Pakistan had apprehended an Daesh militant involved in the 2021 Kabul airport suicide bombing, which killed 13 US service members and nearly 170 Afghans. 
Pakistan has also been ranked as the world’s second-most affected country by “terrorism” in a global index published by the Australian-based Institute for Economics and Peace, which surveyed 163 countries covering 99.7 percent of the world’s population.
Pakistan has experienced a significant surge in militant violence, particularly in its western provinces of Khyber Pakhtunkhwa and Balochistan, where groups like the Tehreek-e-Taliban Pakistan (TTP) and Balochistan Liberation Army (BLA) have targeted civilians and security forces.
The Level 3 travel advisory urges American nationals to reconsider travel to Pakistan while designating a Level 4 threat for the two volatile provinces and areas near the de facto border separating the Pakistani and Indian sides of Kashmir.
“Violent extremist groups continue to plot attacks in Pakistan,” the advisory noted.
“Do not travel to Balochistan Province and Khyber Pakhtunkhwa (KP) Province, which include the former Federally Administered Tribal Areas (FATA), due to terrorism,” it continued, also advising against travel to “the immediate vicinity of the India-Pakistan border and the Line of Control due to terrorism and the potential for armed conflict.”
The advisory noted that militant groups may attack with little or no warning, targeting transportation hubs, markets, shopping malls, military installations, airports, universities, tourist attractions, schools, hospitals, places of worship and government facilities.
It also highlighted that proscribed armed groups have targeted US diplomats and diplomatic facilities in the past.
“Pakistan’s security environment remains fluid, sometimes changing with little or no notice,” the advisory said. “There are greater security resources and infrastructure in the major cities, particularly Islamabad, and security forces in these areas may be more readily able to respond to an emergency compared to other areas of the country.”
It warned the US government has limited ability to provide services to US citizens in KP, Balochistan, Azad Kashmir and most areas outside the major cities.
“Due to the risks, US government personnel working in Pakistan must obtain special authorization to travel to most areas outside of Islamabad, Lahore and Karachi,” it added.


‘I belong here’: Pakistan’s legendary classical dancer, whose art and activism are acts of defiance

Updated 08 March 2025
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‘I belong here’: Pakistan’s legendary classical dancer, whose art and activism are acts of defiance

  • Sheema Kermani, who has led a five-decade-long feminist movement, says dance is integral to Pakistani culture
  • A vocal advocate for oppressed nations, she was asked to leave a diplomatic event after voicing support for Gaza

KARACHI: A veteran Pakistani classical dancer, who co-founded a feminist organization as early as the 1970s, said on Friday her entire career was an act of defiance against societal norms, as she earned recognition for championing women’s rights through artistic performances and activism.
Born into a family that valued the arts, Sheema Kermani said she was exposed to music, literature, theater and painting from an early age.
Initially, she studied fine arts but later embraced classical dance as a form of expression, training under Guru Ghanshyam and his wife, two prominent dancers originally from Bombay, who set up the Rhythmic Arts Academy in Karachi, contributing to the city’s cultural landscape.
However, she said her passion was restrained under the military rule of General Zia-ul-Haq, who seized power in 1977, just two years after she began dancing, and imposed strict Islamic laws, banning dance and music.
“My dance, without me wanting it to, became a form of protest,” she told Arab News. “It became an act of defiance, but defiance through art.”
“It was a statement saying this is beautiful, this is love, this is devotion, this is a celebration of nature, of the universe, of life, and I will continue doing it,” she added.
Kermani said the general tried to legitimize his rule by launching a program to transform Pakistan into an Islamic state, making people believe that music and dance were alien to their country’s culture.
“But I felt it was part of our culture,” she continued, arguing that a look at Indus Valley Civilization excavations reveals statues of dancing figurines, proving the historical roots of performance arts in the region.
In the late 1970s, Kermani co-founded Tehreek-e-Niswan, a feminist organization that used art to advocate for women’s rights. She also worked as an actor, starring in several dramas, including the popular “Chand Grehan,” where she played the role of Ameer-ul-Nisa.
Kermani said her activism extended beyond the stage, making her instrumental in launching Aurat March in 2018, an annual demonstration advocating for gender equality and social justice.
“We wanted to say that the road is also our space, the park is also our space,” she said. “Why should we be confined only within four walls and a veil? We are equal humans. So, recognize us as equal human beings, and we will fight for our spaces.”
Held annually on March 8 to celebrate International Women’s Day, Aurat March takes place in major cities like Karachi, Lahore and Islamabad, often sparking debates due to its bold slogans and demands for legal, social and economic reforms. Over the years, it has gained momentum, drawing thousands of participants from diverse backgrounds.


For Kermani, the day symbolizes global feminist solidarity.
“It’s about our freedoms, it’s about our liberties, it’s about the celebration of those women who died but who struggled, who fought, who kept on fighting and left something better for their daughters to follow,” she said.
This year, Aurat March will be held on May 11, aligning with Mother’s Day to highlight unpaid labor and a woman’s right to choose motherhood.
Kermani said March 8 will focus on solidarity with Palestinian women, who have suffered due to the brutal conflict in Gaza, and Afghan women, who are denied education.
Kermani said such global causes came close to her heart and recalled how she was asked to leave a British diplomatic event in November 2023 after she raised pro-Palestinian slogans.
“I see in the future a society where there is no war,” she said. “You know, I think women will play a role in that because women are basically, I think, intrinsically anti-war. Women are nurturers, they give birth to children, they raise children, they create harmony and love between humans.”
Asked if she ever thought of moving abroad in the face of opposition, she said that while other dancers left Pakistan when their profession was banned under Zia’s regime, she instead chose to perform solo.
“Why should I go away from this country?” she asked. “It’s my country, my heritage and my culture.”
She said she would continue to perform and advocate for social change.
“I don’t feel tired. I think I’ll do it till I die because it makes me happy.”