International Monetary Fund warns of high downside risks for Pakistan’s economy

Islamabad: The International Monetary Fund (IMF) has issued a stark warning about Pakistan’s economic future, highlighting exceptionally high downside risks in its latest report.

The report, released ahead of talks between the Pakistani government and the IMF on a new long-term programme, underscores concerns about the country’s stability and the challenges it faces, Dawn reported.

According to the IMF staff report, “Downside risks remain exceptionally high. While the new government has indicated its intention to continue the SBAs (standby arrangement) policies, political uncertainty remains significant.” This uncertainty, it warns, could have profound effects on policymaking, particularly given the high cost of living and other political complexities.

The IMF also cautions that policy slippages, coupled with decreased external financing, could derail Pakistan’s progress towards debt sustainability and put pressure on the exchange rate.

Furthermore, external stability is threatened by factors such as higher commodity prices, shipping disruptions, and tighter global financial conditions, all of which could exacerbate the nation’s financial challenges, as reported by Dawn. (ANI)

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