ISLAMABAD: President Asif Ali Zardari thanked Saudi Arabia, the United Arab Emirates and Turkiye for supporting Pakistan through its economic challenges, reiterating Islamabad’s push to further strengthen ties with the friendly countries. 

Debt rollover commitments from Pakistan’s regional allies Saudi Arabia, UAE and China have been instrumental in helping Islamabad secure financial bailout packages from the International Monetary Fund (IMF), including a $7 billion program that was approved last year and is currently in its first review. Saudi Arabia and UAE have also bailed Pakistan out through loans and deferred oil payments.

“We deeply appreciate the support of our trusted friend Saudi Arabia, the United Arab Emirates, Turkiye and others who have stood by us in times of economic challenges,” Zardari said in an address to a joint session of Pakistan’s parliament in Islamabad.

“We are committed to further strengthening long standing historical and cultural, and economic ties with these friendly nations.”

Zardari addressed parliament as Pakistan navigates a tricky path to economic recovery after a prolonged macroeconomic crisis and faces a spike in terror attacks, particularly in its Balochistan and Khyber Pakhtunkhwa provinces. The government says its economic reforms over the past one year have yielded fruit, pointing to improving macroeconomic indicators such as GDP growth recovering in FY24 and continuing into this year, fueled by sound macroeconomic management and inflation control. 

Speaking about internal affairs, the president acknowledged the surge in militancy in Pakistan in recent years but credited the country’s armed forces for dismantling terror networks, paying tribute to security forces battling militants and sacrificing their lives for the homeland. 

Zardari also addressed recent counter-terrorism cooperation between Pakistan and the United States, which led to the arrest of key Daesh operative Mohammad Sharifullah, accused of planning an attack at Kabul airport in 2021 which killed at least 170 Afghans and 13 US soldiers as they sought to help Americans and Afghans flee in the chaotic aftermath of the Taliban takeover. The attack was claimed by Daesh-K, the Afghan branch of the Daesh group. 

“The recent successful counterterrorism cooperation between the US and Pakistan is encouraging,” Zardari said. “And the two countries should build on this success to renew and enhance cooperation for joint goals.”

Besides economic challenges and terrorism, Pakistan’s coalition government is also grappling with a long political stalemate marked by worsening tensions with the opposition Pakistan Tehreek-e-Insaf of jailed ex-premier Imran Khan. 

Khan was ousted from power in a parliamentary vote of no confidence in 2022, which plunged the country into prolonged political uncertainty, with his PTI emerging as a thorn in the side of the federal government and the military and keeping the country’s politics on razor’s edge by holding regular protests and speaking about the party’s alleged persecution and rights abuses at international platforms. 

Zardari’s speech on Monday was also marred by loud chanting and sloganeering by the opposition throughout, particularly parliamentarians from the PTI whose noisy protests made it difficult for the president to be heard.

KARACHI: Pakistan’s central bank held its key policy rate at 12 percent on Monday, it said in a statement, a widely unexpected move which halted an easing cycle that witnessed six straight reductions since June.
The central bank has slashed rates by 1000 bps from an all time high of 22 percent in June 2024, to revive economic sentiment and growth, while navigating reforms under a $7 billion facility from the International Monetary Fund (IMF) in September.
“On balance, the MPC (monetary policy committee) assessed the current real interest rate to be adequately positive on forward-looking basis to sustain the ongoing macroeconomic stability,” the bank statement said.
The State Bank of Pakistan (SBP), despite the halt in cuts, is one of the most aggressive central banks among central banks of emerging markets during the current easing cycle and has topped the 625 bps in rate cuts it did in 2020 during the COVID-19 pandemic.
At its last policy meeting, SBP kept its forecast of full-year GDP growth at 2.5 percent to 3.5 percent, and predicted faster growth would help boost foreign exchange reserves that had been lacklustre.
Pakistan’s economy grew by 0.92 percent in the first quarter of the fiscal year 2024-25 which ends in June.
Ten of 14 analysts surveyed by Reuters expected the central bank to cut its key rate, while four expected it to hold the rate. Analysts surveyed said they expect inflation may pick up in May as the base year effect wears off.
Pakistan’s consumer inflation rate slowed to a near decade low of 1.5 percent in February, largely due to a high year-ago base. That was below the government’s forecast and significantly lower than a multi-decade high of around 40 percent in May 2023.