Pakistan to seek IMF flexibility amid regional tensions and oil price pressures

ISLAMABAD: Pakistan will seek flexibility in its International Monetary Fund programme to make room for emerging contingencies linked to the US-Israeli war on Iran and to pass on the impact of petroleum prices to consumers, according to the Ministry of Finance.

The announcement came after a meeting on Thursday between Finance Minister Muhammad Aurangzeb and US Charge d’Affaires Natalie Baker ahead of the upcoming spring meetings of the IMF and the World Bank later this month.

In an official statement, the finance ministry said the two sides reviewed Pakistan’s ongoing engagement with international financial institutions and development partners, including efforts to sustain the pace of reforms under the IMF programme.

“The finance minister reiterated Pakistan’s commitment to fiscal discipline while seeking flexibility in light of evolving global and regional challenges,” the statement said.

The ministry said the discussion took place against the backdrop of a continuing rise in global markets. Pakistan wanted policy space within the IMF framework to respond to changing external conditions, particularly those stemming from the regional conflict involving Iran.

Talks held before IMF and World Bank meetings

The meeting was held in advance of the spring meetings of the IMF and the World Bank scheduled for later this month. The finance ministry said the exchange covered Pakistan’s economic engagement with multilateral lenders and development partners at a time when the country is working to maintain reform momentum under its IMF programme.

The official statement framed the government’s position as one of continued fiscal discipline while also seeking room to manage the effects of global and regional developments. The ministry specifically linked the request for flexibility to evolving contingencies arising from the US-Israeli war on Iran and the pressure created by petroleum prices.

Pakistan intended to pass on the burden of petroleum prices to consumers. The ministry’s statement, as cited in the report, presented this in the context of broader economic management and ongoing discussions with international financial institutions.

US support discussed in meeting

The meeting with Natalie Baker also took place as Pakistan prepares for further engagement with the IMF and the World Bank. The finance ministry said both sides discussed the country’s reform agenda and its interaction with development partners.

The Dawn report said the development came amid a continuous surge in the global market. The government’s position was announced by the Ministry of Finance following the meeting between Aurangzeb and the US diplomat.

The ministry’s statement underscored that Pakistan remained committed to fiscal discipline even as it sought adjustments within the IMF programme to address the impact of changing global and regional circumstances.