IMF says inflation to slow growth across Middle East, Pakistan this year

In this file photo taken on September 14, 2022 People gather at a beach in the Gulf emirate of Dubai. (AFP/File)
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Updated 03 May 2023
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IMF says inflation to slow growth across Middle East, Pakistan this year

  • The international lending agency predicts regional growth to drop from 5.3 percent last year to 3.1 percent
  • Rising interest rates, used by central banks to stem inflation’s rise, are increasing the costs of borrowing money

DUBAI: Economies across the Middle East and Central Asia will likely slow this year as persistently high inflation and rising interest rates bite into their post-pandemic gains, the International Monetary Fund (IMF) said Wednesday.

The IMF’s Regional Economic Outlook blamed in part rising energy costs, as well as elevated food prices, for the estimated slower growth. The report said that while oil-dependent economies of the Gulf Arab states and others in the region have reaped the benefits of elevated crude prices, other countries — such as Pakistan — have seen growth collapse after an unprecedented flooding last summer or as economic woes worsened.

The regional slowdown also comes as an explosion of fighting in Sudan between two top rival generals — who only a year ago as allies orchestrated a military coup that upended the African country’s transition to democracy — threatens a nation where IMF and World Bank debt relief remains on hold.

Rising interest rates, used by central banks worldwide to try to stem inflation’s rise, increase the costs of borrowing money. That will affect nations carrying heavier debts, the IMF warned.

“This year we’re seeing inflation again being the most challenging issue for most of the countries,” Jihad Azour, the director of the Middle East and Central Asia Department at the IMF, told The Associated Press. “For those who have high level of debt, the challenge of increase in interest rate globally, as well as also the tightening of monetary policy, is affecting them.”

The IMF forecast predicts regional growth will drop from 5.3 percent last year to 3.1 percent this year. Overall, regional inflation is expected to be at 14.8 percent, unchanged from last year, as Russia’s war on Ukraine continues to pressure global food supplies and affect energy markets.

It will be even worse in Pakistan, where the IMF projected inflation to more than double, to about 27 percent. Pakistan and IMF officials have held repeated talks over the release of a stalled key tranche of a $6 billion bailout package loan to Islamabad.

The IMF warned that financial conditions worldwide will tighten this year, brought on in part by two bank failures in the United States in March. The sudden collapse of Credit Suisse before it was purchased by UBS also strained markets.

For Sudan, Azour acknowledged the challenge as the country faces a humanitarian crisis brought on by the weeks of fighting there. The violence has also worsened a debt crisis that has gripped the country for decades as it faced Western sanctions.

“We have worked with the government of Sudan, for the Sudanese people, in order to help them by achieving a debt operation that would allow Sudan to have a debt relief of more than $50 billion,” Azour said.

“But unfortunately, the recent developments ... put in a halt to all of those efforts,” he added.


Qatari ambassador discusses bilateral investment and ties with Sindh governor

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Qatari ambassador discusses bilateral investment and ties with Sindh governor

  • Qatari envoy expressed interest in large-scale investments in Pakistan, particularly Karachi, says Sindh Governor
  • PM Shehbaz Sharif last month visited Qatar to boost foreign trade, investment to stabilize $350 billion economy

KARACHI: Qatar’s Ambassador to Pakistan Ali Mubarak Ali Essa Al-Khater met Sindh Governor Kamran Tessori on Wednesday to discuss ways to increase bilateral investment and foster stronger ties between the two countries, the Governor House said. 

Pakistan’s Prime Minister Shehbaz Sharif last month visited Qatar as he sought to bolster economic cooperation amid the country’s efforts to boost foreign investment and stabilize its frail $350 billion economy.

Islamabad and Doha have attempted to forge closer business ties over the past few months, with a Qatar Investment Authority (QIA) team also expected to visit Pakistan this month to set up an information technology (IT) park. 

Al-Khater called on Tessori at the Governor House in Karachi where the two held a detailed meeting to discuss investment and other matters. 

“The meeting focused on matters of mutual interest and fostering stronger bilateral ties,” the Governor House said. “During the visit, the Ambassador praised the Governor’s initiative and expressed Qatar’s desire to strengthen relations further with Pakistan, particularly in economic collaboration.”

Tessori spoke to reporters after the meeting, acknowledging that Qatar had always supported Pakistan. He added that Pakistanis harbored “immense affection for Qatar.”

“He shared that the Ambassador conveyed Qatar’s keen interest in large-scale investments in Pakistan, particularly in Karachi,” the statement said. 

Tessori highlighted that Qatar was interested in government-to-government investments and joint ventures with Pakistani businesses. 

The Sindh governor said Al-Khater assured him of local Qatari investors’ readiness to invest in Pakistan. 

“I will provide detailed insights into sectors that can yield immediate results for investments, ensuring that this partnership benefits both nations significantly,” Tessori said.

He emphasized that Qatar’s interest is particularly crucial given Pakistan’s current economic challenges. 

“We are committed to providing a conducive environment and guarantees for Qatari investors to achieve substantial returns,” Tessori said.  

Pakistan’s desire to forge closer economic ties with allies come amid its attempts to increase trade and foreign investment after the country narrowly escaped a default last year by securing a last-gasp $3 billion financial assistance package from the International Monetary Fund (IMF).


Pakistan dispatches 21st aid consignment for Gaza, Lebanon and Syria

Updated 27 November 2024
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Pakistan dispatches 21st aid consignment for Gaza, Lebanon and Syria

  • Islamabad dispatches 17 tons of blankets, food, medicines to Damascus in Syria from Rawalpindi 
  • Israel’s military campaigns have killed over 44,000 Palestinians in Gaza since October last year

ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) on Wednesday dispatched its 21st relief consignment for the war-affected people of Syria, Lebanon and Gaza who have suffered from Israeli military aggression in the Middle East. 

Israel has been attacking what it calls Iran-linked targets in Syria for years but has ramped up such raids since the Oct. 7, 2023, attack by Hamas on Israel, leading Israel to launch a military campaign in which more than 44,000 Palestinians have been killed in Gaza and more than 3,500 people in Lebanon.

On Tuesday, Israel approved a ceasefire agreement with Lebanon’s Hezbollah group that ended nearly 14 months of fighting linked to the war in Gaza. International aid agencies and the World Health Organization (WHO) have warned Israel’s military operations in Gaza have caused starvation and diseases for thousands of people in the area.

“On the directives of the Prime Minister of Pakistan, National Disaster Management Authority (NDMA) continues to provide humanitarian aid to the war-affected people of Gaza, Lebanon and Syria,” the NDMA said in a statement. 

The 21st consignment was dispatched from Pakistan’s eastern city of Rawalpindi to Syria. The relief items were sent with the help of the Pakistan Air Force, the NDMA said, adding that they comprised 17 tons of supplies which included blankets, food and medicines. 

The NDMA said Pakistan has dispatched a total of 1,273 tons of relief items to the war-affected people of Gaza, 372 tons to the people of Lebanon, and 111 tons to Syria. 
 “The Government of Pakistan continues to send relief supplies based on the needs of the war-affected populations of Lebanon and Palestine,” the authority said. 

Since the beginning of Israel’s war on Gaza, Pakistan has repeatedly raised the issue at the United Nations, the Organization of Islamic Cooperation and other multilateral platforms and demanded international powers and bodies stop Israeli military actions in Gaza.


Pakistan, South Korea conduct joint drill in Arabian Sea to deter piracy, drug trafficking

Updated 27 November 2024
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Pakistan, South Korea conduct joint drill in Arabian Sea to deter piracy, drug trafficking

  • Exercise included tactical maneuvers and communication drills to foster interoperability
  • Pakistan, South Korea are both part of 46-nation Combined Maritime Forces partnership

ISLAMABAD: Pakistan Navy’s PNS Zulfiqar conducted a joint exercise with South Korea’s Wang Geon ship in the Arabian Sea on Wednesday, the navy said, with the drill aimed at intensifying efforts to deter illicit maritime activities such as piracy and drug trafficking. 

Both ships took part in the exercise under the task forces of the Combined Maritime Forces (CMF), CTF-150 and CTF-151, respectively. The CMF is a 46-nation naval partnership, which exists to promote security, stability and prosperity worldwide. 

Pakistan Navy said the Passage Exercise included tactical maneuvers and communication drills, adding that these were aimed at enhancing operational interoperability and fostering professional ties between the two navies. 

“CTF-150 and CTF-151 focus on deterring illicit maritime activities such as drug trafficking and piracy, which threaten security in international waters,” the navy said in a statement. 

Pakistan said the exercise demonstrated both navies’ commitment to uphold maritime security, support lawful activities at sea and promote stability and cooperation in the region.

“Pakistan and the Republic of Korea consistently contribute ships and aircraft to maritime security efforts under the CMF banner,” the navy said.

“This collaboration is particularly valuable for building mutual understanding and operational synergy.”

Pakistan Navy regularly collaborates and holds joint military exercises with allies and countries that are part of the CMF to deter piracy, drug trafficking and other illicit maritime activities. 
 


Pakistan, China agree to strengthen defense ties amid regional challenges

Updated 27 November 2024
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Pakistan, China agree to strengthen defense ties amid regional challenges

  • General Asim Munir hosts vice chairman of China's Central Military Commission at the GHQ
  • Chinese general praises Pakistan’s commitment to ties with Beijing, counter-terrorism efforts

ISLAMABAD: Pakistan and China on Wednesday agreed to enhance bilateral defense cooperation, with both sides emphasizing the strategic importance of their partnership during high-level discussions at the army’s General Headquarters (GHQ) in Rawalpindi.
General Zhang Youxia, Vice Chairman of China’s Central Military Commission, led a delegation to meet Pakistan’s Chief of Army Staff, General Syed Asim Munir. The visit included a one-on-one meeting between the two generals, followed by delegation-level talks.
"The engagements focused on matters of mutual interest, regional security dynamics, measures for regional stability, and enhancing bilateral defense cooperation," the military’s media wing, Inter-Services Public Relations (ISPR), said in a statement.
"General Asim Munir underscored the enduring and all-weather nature of Pakistan-China relations, emphasizing their foundation of mutual trust and cooperation," the statement added, noting that the army chief thanked the Chinese leadership for standing firmly with Pakistan, irrespective of changes in the international and regional environment.
The ISPR also quoted the Chinese general praising Pakistan’s commitment to the strategic partnership, commending the army’s professionalism and resolve in counter-terrorism efforts. He reiterated China’s determination to strengthen defense ties and deepen collaboration for regional stability.
China already plays a pivotal role in Pakistan’s economic and strategic framework, primarily through the China-Pakistan Economic Corridor (CPEC). However, Chinese authorities have expressed concerns over attacks on their nationals working on various CPEC projects by militant groups of differing ideologies.
Earlier, General Zhang paid tribute to Pakistan’s fallen soldiers by laying a floral wreath at the Martyrs’ Monument upon his arrival at GHQ. He was accorded a ceremonial guard of honor by a contingent of the Pakistan Army.


inflation seen slowing to 5.8 percent-6.8 percent in November, ministry says

Updated 27 November 2024
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inflation seen slowing to 5.8 percent-6.8 percent in November, ministry says

  • Inflation may further slow to 5.6 percent-6.5 percent in December, says ministry
  • Pakistan slashed interest rates by 250 basis points earlier in November

KARACHI: Inflation in Pakistan is expected to slow to 5.8 percent-6.8 percent in November, and then further to 5.6 percent-6.5 percent in December, the finance ministry said in its monthly economic report on Wednesday.

The South Asian country slashed interest rates by 250 basis points earlier in November in a bid to revive a sluggish economy amid a big drop in the rate of inflation.

Inflation clocked in at 7.2 percent in October, a sharp drop from a multi-decade high of nearly 40 percent in May 2023.