KARACHI: Pakistan and the International Monetary Fund (IMF) on Tuesday formally kicked off talks for the first review of a $7 billion bailout program that Islamabad secured last year, the finance ministry confirmed in a statement.
A Pakistani finance ministry official told Arab News on Monday, requesting anonymity, that a nine-member mission led by Nathan Porter had landed in Pakistan to assess the country’s economic performance to determine the release of a $1.1 billion tranche over the following three weeks.
Pakistan’s macroeconomic indicators have gradually improved since it secured the IMF bailout last summer. The country’s consumer price index (CPI) inflation rate, maintaining a downward trend on Monday, hit a more than 9-year low at 1.51 percent year-on-year in February.
Pakistan’s current account recorded a surplus of $682 million from July 2024 till January 2025, compared to a deficit of $1.8 billion during the same period of the previous year, according to the central bank data. The Pakistan Stock Exchange (PSX) also reported record gains last year, with frequent bullish trends dominating the market.
Pakistan’s current account recorded a surplus of $682 million in January, marking the sixth consecutive month since the country reported a current account surplus. The Pakistan Stock Exchange (PSX) also reported record gains last year, with frequent bullish trends dominating the market.
“Pictures of kick-off meeting held today,” the finance ministry wrote as caption of two photos shared with media on WhatsApp. The pictures showed Pakistani officials, led by Finance Minister Muhammad Aurangzeb, involved in discussions with an IMF delegation led by its Pakistan mission chief Nathan Porter.
Pakistan’s finance ministry has so far not shared any details of the talks between the government and the IMF. However, local media has widely covered the delegation’s visit.
Speaking to international news agency Reuters, Aurangzeb said Pakistan is “well-positioned” for the first review.
“They are here. We will have two rounds of talks, first technical and then policy level,” Aurangzeb said. “I think we are well positioned,” he added.
The IMF team usually spends around two weeks reviewing fiscal reforms and policy.
Last week, a separate IMF team visited Pakistan to discuss around $1 billion in climate financing on top of the EFF. That disbursement will take place under the IMF’s Resilience and Sustainability Trust, created in 2022 to provide long-term concessional cash for climate-related spending, such as adaptation and transitioning to cleaner energy.
Pakistan, IMF kick off talks on $7 billion bailout program review
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Pakistan, IMF kick off talks on $7 billion bailout program review
- IMF delegation led by Nathan Porter arrived in Pakistan on Monday to assess country’s economic performance
- Pakistan secured the $7 billion Extended Fund Facility (EFF) last summer as part of an economic recovery plan
Pakistan’s average inflation to remain between 5.5-7.5% during FY25— central bank
- Pakistan’s real GDP growth rate expected to hover between 2.5-3.5%, says State Bank of Pakistan
- Central bank says “strong momentum” in remittances, exports to continue outpacing increase in imports
ISLAMABAD: Pakistan’s average inflation is expected to remain in the 5.5-7.5% range in the fiscal year ending June 2025, the country’s central bank said in its half-yearly economic report this week, stating that its real GDP growth is expected to hover between 2.5-3.5%.
Pakistan’s economy has improved in recent months, supported by declining inflation, which caused the central bank to reduce its policy rate to 12% after a series of cuts totaling 1,000 basis points since June 2024.
In a report titled “The State of Pakistan’s Economy, Half Year Report FY25” released on Monday, the State Bank of Pakistan (SBP) noted that inflationary pressures have receded notably, with headline inflation reaching a multi-decade low of 0.7% by March 2025.
“In view of steeper-than-anticipated disinflation, combined with an adequately tight monetary policy stance, continued fiscal consolidation and an ease in global commodity prices, the SBP projects average inflation for FY25 to fall in the range of 5.5–7.5 percent,” the SBP said in a press release.
Pakistan’s inflation rate rose to a record high of 38% in May 2023 on account of surging food and fuel costs. This was caused by Islamabad’s move to withdraw energy and fuel subsidies under a deal agreed with the International Monetary Fund in exchange for a financial bailout package.
The report said Pakistan’s current account balance is projected to remain in the range of -0.5 to 0.5 percent of the GDP. The central bank said it expects a “strong momentum” in foreign remittances and exports to continue outpacing the increase in imports.
“This is expected to cushion against lower financial inflows and help strengthen external buffers,” the report said. “The SBP’s projection for real GDP growth remains unchanged in the range of 2.5–3.5 percent.”
The report highlighted downside risks in the form of additional fiscal consolidation and less-than-expected wheat harvests. It pointed out risks to the medium-term outlook, largely stemming from global trade disruptions and related commodity price volatility in light of Washington’s tariffs, changing geo-political situations, adjustments in administered energy prices and spillover of movements in international currencies on the local currency.
Saudi ministers highlight real estate and urban-planning successes under Vision 2030
- Housing minister Majid Alhogail praises accomplishments including development of the Khuzam modern-housing suburb on the outskirts of Riyadh
- ‘We have worked in the municipal and housing sector to redefine the city as a balanced, green, smart environment that meets needs and inspires ambition for residents,’ he says
RIYADH: Ministers on Monday showcased the achievements so far within Saudi Arabia’s real estate and housing sector since the launch in 2016 of Vision 2030, the Kingdom’s plan for national development and diversification, and the effects it is having on future strategies.
Housing minister Majid Alhogail highlighted in particular his ministry’s achievements over the past year, including the development of the Khuzam modern-housing suburb on the outskirts of Riyadh.
“This model is one of the examples that greatly helped in changing the concept of housing into a living environment,” he said.
“Last year was a leader in many achievements, investments, industry and logistics services, where the municipal sector plays a significant and influential role.”
The municipal and housing sector accounts for 14 percent of the Kingdom’s gross domestic product, the housing sector provides more than 500,000 jobs, and more than 300,000 entities operate under the supervision of the Ministry of Municipalities and Housing, Alhogail said.
He also noted the growth of investment in the real estate market, adding: “The construction and real estate sector contributed more than 16 percent of total foreign investment flows, reflecting investors’ confidence in the readiness of cities and the regulatory environment we are continuously developing.”
He also highlighted the important need to create a balanced environment within modern smart cities that can better serve the needs of citizens and enhance their quality of life, and said this is something to which he is fully committed.
“We have worked in the municipal and housing sector to redefine the city as a balanced, green, smart environment that meets needs and inspires ambition for residents,” he said as he stressed the importance of ensuring cities are designed for the benefit of people rather than for cars.
“By the end of this year, we also aim to achieve a 61 percent increase in residents’ access to public spaces within an 800-meter radius.
“Regarding quality of life in the municipal sector, we have been keen since day one to ensure that the city is not just a place to live but rather a complete space for life.”
Six Saudi cities are now officially ranked as smart cities by the IMD World Smart Cities Index, Alhogail noted — AlUla. Makkah, Madinah, Riyadh, Jeddah and Alkhobar — reflecting the achievements within the sector.
His ministry considers effective urban planning as the starting point for the development and improvement of municipal spaces, he continued. This was also reflected by the launch last month of the Saudi Architecture Characters Map, guided by Crown Prince Mohammed bin Salman, which aims to enrich the urban landscape through the celebration of 19 distinct architectural styles inspired by the Kingdom’s cultural and natural heritage.
The Saudi media minister, Salman Aldosari, also spoke about the achievements to date within the sector and noted that some objectives were met ahead of schedule.
Acknowledging the challenges and opportunities arising from Vision 2030, he said that Saudi ambitions have surpassed the obstacles, adding: “The year 2024 (was) the year of records.”
Saudi Arabia, Egypt strengthen industrial ties with new initiatives
RIYADH: Saudi Arabia and Egypt are advancing efforts to strengthen their industrial and economic partnership, as officials emphasized the importance of trade facilitation, industrial integration, and government-backed support.
Speaking at the Saudi-Egyptian Industrial Forum in Riyadh, Minister of Industry and Mineral Resources Bandar Alkhorayef announced that the Saudi Export-Import Bank has completed SR1.3 billion ($346.5 million) in operations, highlighting the strong bilateral relationship between the two nations.
“The industrial strategy emphasizes the importance of industrial integration with other countries, especially Egypt,” he stated, noting that cooperation pathways include industry, mining, and trade, as well as supply chains, human resources, research, and innovation.
He highlighted the vital role of government agencies in supporting exporters and importers from both countries.
Bandar Al-Ameri, chairman of the Saudi-Egyptian Business Council, highlighted that trade between the Kingdom and Egypt increased by 28 percent in 2024, citing the strengthening economic partnership between the business communities of the two nations.
Al-Ameri pointed to the signing of a bilateral investment protection agreement as a strategic achievement and emphasized Egypt’s role as a major economic partner and gateway to African markets.
Hassan Al-Hwaizy, chairman of the Federation of Saudi Chambers, welcomed the Egyptian delegation, stating that Saudi-Egyptian economic relations are based on genuine partnership rather than figures alone.
He called for enhancing cooperation in industry and trade and encouraged the establishment of joint projects, specifically to serve African markets.
Vice Minister of Industry and Mineral Resources for Industrial Affairs Khalil Ibn Salamah explained that the industrial partnership focuses on five strategic sectors, including pharmaceuticals, automotive, construction materials, textiles, and food industries.
He emphasized the strategic alignment between the industrial initiatives of both countries and urged Egyptian manufacturers to seize the opportunities available in the Saudi market, noting the Kingdom’s target to establish 24,000 new factories over the next decade.
The Saudi-Egyptian Industrial Forum, held in Riyadh under the patronage of the Saudi Minister of Industry and Mineral Resources, gathered more than 300 leaders and investors from the Saudi and Egyptian industrial sectors.
Organized by the Federation of Saudi Chambers in cooperation with the Federation of Egyptian Industries, the forum focused on strengthening strategic cooperation and promoting pathways for industrial integration.
The event also showcased available investment opportunities in priority sectors under the Kingdom’s National Industrial Strategy, emphasizing the growing Saudi-Egyptian industrial base, which aims to expand investments in the pharmaceutical, automotive, construction materials, textiles, and food industries.
Saudi debt capital market nears $500bn mark amid global uncertainty
- Kingdom’s sukuk dominance and Vision 2030 progress fuel 16 percent annual growth, Fitch Ratings reports
RIYADH: Saudi Arabia’s debt capital market continued its upward trajectory in the first quarter of 2025, defying global challenges and uncertainties.
The market reached $465.8 billion by the end of March, marking a 16 percent year-on-year increase, with sukuk accounting for 60.4 percent of the total, according to Fitch Ratings.
The Kingdom’s debt market is poised to surpass $500 billion in outstanding value by the end of 2025, driven by strong economic fundamentals, diversified funding strategies, and continued progress under Vision 2030.
Fitch Ratings, in its latest report, noted that the sector’s further expansion this year will be supported by increased fiscal deficits, heightened project financing needs, and regulatory initiatives aimed at boosting non-oil economic growth.
“Saudi entities were the largest US dollar debt issuers among emerging markets (excluding China) in the first quarter of 2025. The country also led global dollar sukuk issuance and was the largest debt capital market issuer in the GCC,” said Bashar Al-Natoor, global head of Islamic finance at Fitch Ratings.
He added: “We expect lower oil prices and increasing deficits will drive issuance in 2025 and 2026. Banks, corporates and projects are likely to seek more diverse funding through the DCM, enhancing market development. We rate about 80 percent of the outstanding US dollar Saudi sukuk market, with almost all investment-grade and no defaults.”
Issuance in the first quarter of 2025 surged by 202.4 percent compared to the previous quarter, reaching $37.3 billion. Environmental, social, and governance debt made up 9 percent of dollar-denominated DCM issuance during the period.
The expansion of Saudi Arabia’s asset management industry, whose assets under management have now exceeded SR1 trillion, is also playing a key role in supporting the growth of the Kingdom’s debt capital market.
Saudi momentum
In an interview with Arab News on the sidelines of the Fitch on Saudi Arabia event held in Riyadh, Al-Natoor lauded the Kingdom debt market for weathering global economic challenges.
“I think that by itself is something that’s very notable, because there is a lot of turbulence and there is a lot of uncertainties, and despite that, we’ve still seen the market growing,” Al-Natoor said, adding that he expected to see continued growth.
He went on to say that a range of bodies — including government, corporates, financial institutions and banks — are involved with developing the debt capital market, then funding the maturities that are coming.
“All of these are drivers, and key drivers for further growth, growth of the debt capital market,” he said.
Al-Natoor noted that several factors, including the need to diversify funding sources and the ambitious project underway in the Kingdom, are acting as key drivers of growth for Saudi Arabia’s debt capital market from the issuer side.
On investor appetite, he said: “We’re having a vibrant market in the first quarter where it shows that local investor, regional investor and international investor, of course, at varying degrees, are still interested in the market, so there is an investor appetite in that.”
He cautioned, however, that the Saudi market is not insulated from global volatility.
“Of course the appetite of the investors, maybe some uncertainties, will have a toll on the market itself. However, the actual fundamentals of the market growth are still intact, and the market is still expected to grow in the future,” Al-Natoor said.
According to Fitch, the Kingdom’s budget deficit is forecasted to widen to 5.1 percent of gross domestic product in 2025, up from 2.8 percent in 2024, with oil prices expected to average $65 per barrel.
Government debt is projected to rise to nearly 37 percent of GDP by the end of 2026, from 29.9 percent in 2024.
Foreign investor participation in government local issuances increased to 7.7 percent at the end of the first quarter, compared to 4.5 percent at the end of 2024.
About 94.2 percent of rated Saudi sukuk remain within the “A” category, with almost all issuers maintaining stable outlooks.
Looking ahead, Al-Natoor said: “We don’t have specific numbers, but we do expect that the growth momentum to continue in 2025 and 2026 maybe step further.”
He added that changes to “global scenery” could have an impact on appetite and liquidity in this area, which may lead to a “toll on the growth” of debt capital markets that lasts into next year.
Al-Natoor noted that government entities and banks are currently the primary drivers of debt issuance in Saudi Arabia.
While major corporations such as Aramco and the Public Investment Fund have also begun tapping into the debt capital market, their participation has not significantly shifted the overall market structure.
He suggested that although more corporate issuers may gradually enter the market, the dominant role of government and banks in issuance activity is expected to remain unchanged in the short to medium term.
“The actual strategy of diversifying funding is to take it down the chain from the government to banks to corporates to projects to infrastructure and so the actual long-term ambition is to involve more of these,” he said.
Al-Natoor continued: “However, over the short to medium term, we do expect that the government and the banks will play a big role.”
He added that it will take time until “the momentum goes down the chain.”
Economic resilience
In a separate interview with Arab News, Paul Gamble, head of Middle East and Africa Sovereigns at Fitch Ratings, highlighted that Saudi Arabia’s non-oil economy showed resilience despite global uncertainty.
“If you look at the experience of 2024, we saw pretty good non-oil growth at a time of really heightened geopolitical tensions in the region,” Gamble said.
Regarding Saudi Arabia’s Vision 2030 economic transformation, Gamble stressed the importance of separating reform-driven non-oil GDP expansion from government spending-driven growth.
“You have to balance the domestic reform angle — labor market reforms, social reforms, business environment reforms — against the element of non-oil growth that’s driven by government spending and GRE (government-related entities) spending,” he said.
Gamble cautioned that if oil prices remain low and government capital spending is cut significantly, it could impact private sector confidence.
He noted: “For the moment, we’re still looking for pretty healthy non-oil growth. Our forecast is 4.2 percent for non-oil growth this year for Saudi Arabia.”
Discussing fiscal pressures, Gamble said: “We’ve revised down our oil price forecast to $65 a barrel, which widened our budget deficit forecast for Saudi Arabia to 5.1 percent of GDP. That will continue to put debt on an upward trend.”
He added: “Oil prices were broadly unaffected, and metrics like tourism inflows and private sector confidence remained strong.”
In the wider Gulf region, Gamble said: “From a rating perspective, four GCC sovereigns have stable outlooks. Bahrain and Oman are exceptions.”
He explained that Bahrain faces significant fiscal challenges at current oil prices, while Oman benefits from past deleveraging efforts and non-oil economic development, supporting its positive outlook.
Saudi aviation surpasses localization goals, boosts women in leadership
JEDDAH: Saudi Arabia’s aviation industry exceeded its 2024 Saudization target, reaching 14,317 national employees — 124 percent of its 2025 goal — as the Kingdom accelerates efforts to become a global aviation hub.
The General Authority of Civil Aviation said women hold 17 percent of leadership roles across airports, airlines, and ground services.
The initiative is part of a broader labor market strategy to boost Saudization, a program launched in 2011 to increase domestic employment in the private sector through industry-specific quotas.
It has helped reduce Saudi unemployment from 12.8 percent in 2018 to 7.1 percent by mid-2024, surpassing the Vision 2030 goal of 8 percent. The Kingdom has set a new target of 5 percent unemployment by 2030.
In an official release, Abdulaziz bin Abdullah Al-Duailej, GACA’s president, noted that the authority had succeeded in its “Saudization of Aviation Jobs” initiative, achieving notable results in 2024.
He emphasized that this progress reflects the depth and inclusiveness of the Vision (2030) and embodies the Kingdom’s comprehensive development across all sectors, the release added.
His comments coincided with the release of the 2024 annual report on Saudi Vision 2030, which showed that the Kingdom had achieved 93 percent of its strategic goals over the past nine years.
According to the annual report, Saudi Arabia’s airports handled 128 million passengers in 2024, marking a 45.8 percent increase since the launch of Vision 2030 in 2016, while air cargo volumes topped 1.2 million tonnes.
GACA president stated that the authority achieved 100 percent of its key performance indicators and initiatives under the Vision Realization Programs. Saudi Arabia ranked 17th globally in the International Air Transport Association’s Air Connectivity Index — surpassing the 2024 target by two ranks.
According to the press release, GACA, during the 1445 Hajj season, launched the Kingdom’s first aerial taxi trial and granted licenses for cutting-edge aviation technologies.
“Several new terminals were opened, and expansions were made to various regional airports as part of the Kingdom’s efforts to adopt future-forward solutions and enhance sustainability in air transport,” it added.
The GACA chief further highlighted the sector’s advancements since the launch of the National Aviation Strategy, including the privatization of airports, the development of King Salman International Airport, the establishment of Riyadh Air, and the ordering of 548 new aircraft.
