Regional

Pakistan clinches last-gasp $3 billion IMF bailout

Published

2 years ago

June 30, 2023

Pakistan secured a badly-needed $3 billion short-term financial package from the International Monetary Fund on Friday, giving the South Asian economy respite as it teeters on the brink of default.

In a long-awaited decision for Pakistan, the IMF said it had reached a staff-level deal with the 220 million nation, which will now be subject to approval by its board in July.

The new nine-month standby arrangement came hours before a current IMF agreement expires, offering relief to Pakistan, which is battling an acute balance of payments crisis.

Prime Minister Shehbaz Sharif said it would put Pakistan “on the path of sustainable economic growth”.

With sky-high inflation and foreign exchange reserves barely enough to cover one month of controlled imports, which analysts say Pakistan’s economic crisis could have spiraled into a debt default in the absence of an IMF deal, Reuters reported.

The deal came only after Sharif held marathon meetings with IMF head Kristalina Georgieva on June 22, which he said represented “a turning point” as the fund’s managing director had not initially appeared very forthcoming.

Pakistan will receive formal documents on the deal later on Friday, Finance Minister Ishaq Dar told Reuters, which he said he would “sign, seal and return by tonight”.

The new deal, which Dar said on Thursday was expected soon, will disburse an upfront amount of $1.1 billion shortly after the IMF board’s meeting in July, he said.

Dar said Pakistan aimed to take the central bank’s foreign exchange reserves to $14 billion by the end of July. “We have stopped the decline, now we have to turn to growth,” he added.

Pakistan’s sovereign dollar bonds were trading higher after the announcement, with the 2024 issue enjoying the biggest gains, up more than 8 cents at just above 70 cents in the dollar, according to Tradeweb data.

The gains were most pronounced in shorter-dated bonds, reflecting lingering skepticism over the longer-term fiscal outlook for the country.

The $3 billion IMF funding is higher than expected as it looks set to replace the remaining $2.5 billion from a $6.5 billion longer-term Extended Fund Facility agreed in 2019.

The deal will also unlock other bilateral and multilateral financing. Long-time allies Saudi Arabia, the UAE and China have already pledged or rolled over billions of loans.

“This will support near-term policy efforts and replenish gross reserves,” the IMF said.

The new arrangement builds on the 2019 programme, IMF official Nathan Porter said in a statement, adding that Pakistan’s economy had faced several challenges in recent times, including devastating floods and rising commodity prices.

“Despite the authorities’ efforts to reduce imports and the trade deficit, reserves have declined to very low levels. Liquidity conditions in the power sector also remain acute,” Porter said.

“Given these challenges, the new arrangement would provide a policy anchor and a framework for financial support from multilateral and bilateral partners in the period ahead.”

Porter also pointed out the power sector’s buildup of arrears and frequent power outages, Reuters reported.

Reforms in the energy sector, which has accumulated nearly 3.6 trillion Pakistani rupees ($12.58 billion) in debt, has been a cornerstone of the IMF talks.

The IMF said it would want steadfast policy implementation by Pakistan to overcome challenges, “particularly in the energy sector”, where it expects a rise in electricity prices.

Dar confirmed that the hike will come ahead of the IMF board review of the bailout, saying the rebasing to be done in July will make about three to four rupees a unit difference.

“Reform does not, must not, mean raising tariff endlessly,” Pakistan’s Minister for Power Khurram Dastgir told Reuters.

With the tenure of the current government ending in August, Dastgir said it had put in place an “aggressive medium-to-long-term plan” to increase renewable energy which was only possible if long-term assistance is available.

Reforms taken

Islamabad has taken measures demanded by the IMF since its mission arrived in Pakistan earlier this year, including revising its 2023-24 budget and a key policy rate hike to 22% in recent days.

It also got Pakistan to raise more than 385 billion rupee ($1.34 billion) in new taxation to meet the IMF’s fiscal adjustments.

The IMF said the central bank should remain proactive to reduce inflation and maintain a foreign exchange framework.

The painful adjustments have already fuelled all time high inflation of 38% year-on-year in May.

“The FY24 budget advances a primary surplus of around 0.4 percent of GDP,” Porter said, adding it will be important that the budget is executed as planned, and authorities resist pressures for unbudgeted spending or tax exemptions.

“This new programme is far better than our expectations,” said Mohammed Sohail of Topline Securities in Karachi, adding there while were a lot of uncertainties on what would happen after a new government comes to power it would “definitely help restore some investor confidence”.

‘Tough journey’ ahead

Meanwhile, on Friday night, Pakistan’s Prime Minister Shehbaz Sharif took to twitter and said while the IMF stand-by agreement “is a much-needed breather, which will help the country achieve economic stability, the nations are not built through loans. I pray for this new program to be the last one.”

He went on to thank Pakistan’s “friends & partners such as China, Saudi Arabia, UAE & Islamic Development Fund for standing by Pakistan at the time of massive economic challenges.

“Under a whole-of-the-government approach, we have worked out an Economic Revival Plan, which will focus on unlocking our strategic potential in agriculture, mine & minerals, defense production & information technology. The Plan will bring up investments of billions of dollars & create job opportunities for four million people.

“It may be a tough journey but as they say, ‘When the going gets tough, the tough gets going’,” he said.

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Imran Khan calls for street movement, urges public to reclaim rights

Khan has appealed for collective action, saying the movement was necessary to restore the rule of law, ensure justice, and end what he described as politically motivated and pre-determined court decisions.

Published

22 hours ago

December 22, 2025

Ariana News

Former Pakistani Prime Minister Imran Khan has called on his supporters and the wider public to prepare for a nationwide street movement, urging citizens to rise in defense of their fundamental rights.

In a message issued from Adiala Jail, where he is currently detained, Khan appealed for collective action, saying the movement was necessary to restore the rule of law, ensure justice, and end what he described as politically motivated and pre-determined court decisions.

Khan said the recent verdict against him was part of sustained political pressure, alleging that the ruling was delivered without due legal process and without giving him a fair opportunity to present his defense. He warned that such practices have severely damaged the credibility of Pakistan’s judicial system.

The former prime minister also called on lawyers, constitutional experts, and members of the legal community to stand with the public and play an active role in safeguarding the Constitution and the rule of law. He said political stability and economic progress were impossible without an independent and impartial judiciary.

Addressing civil-military relations, Khan said his criticism was aimed at individuals rather than institutions. He described the military as belonging to the people of Pakistan, while alleging that actions taken against him in detention were carried out on the instructions of military authorities.

Khan drew comparisons with the 2007 political crisis, warning that continued erosion of the rule of law would have lasting consequences for the country. He praised judges who resist pressure as national heroes and criticized those who, he said, follow orders without question.

The statement comes amid heightened political and judicial tensions in Pakistan, with Khan’s trial and detention continuing to draw strong domestic and international attention.

Regional

Pakistan court hands Imran Khan, wife 17-year jail terms in another graft case

Published

3 days ago

December 20, 2025

Ariana News

A Pakistani court on Saturday sentenced former Prime Minister Imran Khan and his wife Bushra Bibi to 17 years in prison each in a corruption case involving the under-priced purchase of luxury state gifts, the court and Khan’s lawyers said.

The latest conviction adds to a series of legal troubles for Khan, who has been behind bars since August 2023, and is currently serving a 14-year sentence in a separate land graft case, Reuters reported.

He faces dozens of cases filed since he was ousted from office in 2022, ranging from corruption to anti-terrorism and state secrets charges. Khan has denied wrongdoing in all the cases, which his party says are politically motivated.

“The court announced the sentence without hearing the defence and sentenced 17 years imprisonment to Imran Khan and Bushra Bibi with heavy fines,” Khan’s family lawyer Rana Mudassar Umer told Reuters.

They were handed 10 years’ rigorous imprisonment under Pakistan’s penal code for criminal breach of trust and a further seven years under anti-corruption laws, the special court of Pakistan’s Federal Investigation Agency said in its verdict.

Khan’s jail term from Saturday’s ruling would begin after he has served the 14 years from the land graft case, Information Minister Attaullah Tarar said.

The case relates to luxury watches gifted to Khan by Saudi Arabia’s Crown Prince Mohammed bin Salman during official visits, which prosecutors said Khan and his wife then purchased from the state at a heavily discounted price in violation of Pakistan’s gift rules.

Tarrar said the purchase resulted in losses of several million rupees for the state.

Zulfi Bukhari, a spokesperson for Khan, said the verdict “ignores basic principles of justice” and turns the process into “a tool for selective prosecution.”

Khan has told his legal team to appeal the decision at the Islamabad High Court, Salman Safdar, another one of his lawyers, told reporters outside the jail where the trials were being held, Geo News reported.

ANOTHER STATE GIFTS CONVICTION

The case is separate from an earlier state gifts prosecution linked to Khan’s August 2023 arrest. Earlier sentences of 14 years for Khan and seven years for Bushra Bibi were later suspended on appeal. The couple denies wrongdoing.

The cases are commonly known in Pakistan as the Toshakhana cases, referring to the state repository where gifts received by public officials are deposited.

Following the verdict, Khan’s Pakistan Tehreek-e-Insaf (PTI) party announced plans for protests across Punjab on Sunday.

Khan’s party also says routine family and legal visits have been blocked in recent weeks despite court orders. Authorities deny any mistreatment and say he is receiving all facilities available to prisoners.

Khan, a former cricket star turned politician, remains one of Pakistan’s most polarising figures, with his legal battles unfolding as his Pakistan Tehreek-e-Insaf party remains sidelined from power.

Regional

Pakistan’s military chief Asim Munir in spotlight over Trump’s Gaza plan

Munir was earlier this month anointed chief of the defence forces to head the air force and navy as well, with a job extension until 2030.

Published

6 days ago

December 17, 2025

Ariana News

Pakistan’s most powerful military chief in decades faces the toughest test of his newly amassed powers as Washington pushes Islamabad to contribute troops to the Gaza stabilisation force, a move analysts say could spark domestic backlash.

Field Marshal Asim Munir is expected to fly to Washington to meet President Donald Trump in the coming weeks for a third meeting in six months that will likely focus on the Gaza force, two sources told Reuters, one of them a key player in the general’s economic diplomacy.

Trump’s 20-point Gaza plan calls for a force from Muslim nations to oversee a transition period for reconstruction and economic recovery in the war-torn Palestinian territory, decimated by over two years of Israeli military bombardment.

Many countries are wary of the mission to demilitarise Gaza’s Islamist militant group Hamas, which could drag them into the conflict and enrage their pro-Palestinian and anti-Israeli populations.

But Munir has built a close relationship with the mercurial Trump to repair years of mistrust between Washington and Islamabad. In June, he was rewarded with a White House lunch – the first time a U.S. president hosted Pakistan’s army chief alone, without civilian officials.

“Not contributing (to the Gaza stabilisation force) could annoy Trump, which is no small matter for a Pakistani state that appears quite keen to remain in his good graces – in great part to secure U.S. investment and security aid,” said Michael Kugelman, Senior Fellow, South Asia at Washington-based Atlantic Council.

Pakistan, the world’s only Muslim country with nuclear weapons, has a battle-hardened military having gone to war with arch-rival India three times and a brief conflict this summer.

It has also tackled insurgencies in its far-flung regions and is currently embroiled in a bruising war with Islamist militants who it says are operating from Afghanistan.

Pakistan’s military strength means “there is a greater pressure on Munir to deliver his capacity,” said author and defence analyst Ayesha Siddiqa.

Pakistan’s military, foreign office and information ministry did not respond to questions from Reuters. The White House also did not respond to a request for a comment.

Pakistani Foreign Minister Ishaq Dar said last month that Islamabad could consider contributing troops for peacekeeping but disarming Hamas “is not our job.”

Munir was earlier this month anointed chief of the defence forces to head the air force and navy as well, with a job extension until 2030.

He will retain his field marshal title forever, as well as enjoy lifetime immunity from any criminal prosecution under the constitutional amendments that Pakistan’s civilian government pushed through parliament late last month.

“Few people in Pakistan enjoy the luxury of being able to take risks more than Munir. He has unbridled power, now constitutionally protected,” Kugelman added.

“Ultimately, it will be Munir’s rules, and his rules only.”

Over the past few weeks, Munir has met military and civilian leaders from countries such as Indonesia, Malaysia, Saudi Arabia, Turkey, Jordan, Egypt and Qatar, according to the military’s statements, which Siddiqa said appeared to be consultations on the Gaza force.

But the big concern at home is that the involvement of Pakistan troops in Gaza under a U.S.-backed plan could re-ignite protests from Pakistan’s Islamist parties that are deeply opposed to the U.S. and Israel.

The Islamists have street power to mobilise thousands.

A powerful and violent anti-Israel Islamist party that fights for upholding Pakistan’s ultra-strict blasphemy laws was banned in October.

Authorities arrested its leaders and over 1,500 supporters and seized its assets and bank accounts in an ongoing crackdown, officials said.

While Islamabad has outlawed the group, its ideology is still alive.

The party of former jailed premier, Imran Khan, whose supporters won the most seats in the 2024 national elections and has wide public support, also has an axe to grind against Munir.

Abdul Basit, Senior Associate Fellow, S. Rajaratnam School of International Studies in Singapore, said if things escalated once the Gaza force was on the ground, it would cause problems quickly.

“People will say ‘Asim Munir is doing Israel’s bidding’ – it will be foolhardy of anyone not to see it coming.”