IMF Concerned for Pakistan’s Trade Outlook Amid India Tensions

The International Monetary Fund (IMF) has voiced concern over Pakistan’s trade outlook, warning that ongoing global tariff wars and rising tensions with India could impact Pakistan more than the regional average. The remarks came from Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, during a press briefing on the Regional Economic Outlook.

Responding to a question about the fallout of the tariff conflict, Azour stated that the trade tensions would affect Pakistan relatively more compared to its regional counterparts. However, he emphasized that Pakistan could counter these challenges by repositioning its economy to adapt to a transforming global trade environment.

Azour explained that IMF on Pakistan’s trade outlook highlights not only risks but also potential opportunities. As global trade routes and economic patterns shift, Pakistan has a chance to benefit if it enhances its trade connectivity and forges stronger economic ties both within the region and with nearby markets. He noted that countries like Pakistan and Jordan, with higher exposure to U.S. trade activities, are particularly vulnerable to such global economic changes.

The IMF official pointed out that the Middle East and Central Asia region, located between East and West, stands at a strategic crossroads for emerging trade routes. To capitalize on these developments, countries must pursue enhanced cooperation, strengthen intra-regional trade, and improve connectivity.

In addition to discussing trade challenges, Azour acknowledged Pakistan’s recent economic progress. He said that over the past 18 months, Pakistan has made significant strides in restoring macroeconomic stability. Key indicators, such as GDP growth and inflation, have improved—with inflation dropping from 12.6% in the 2024 fiscal year to 6.5% this year, and projections suggesting it will stay at that level next year. Pakistan’s debt levels have also stabilized, and international rating agencies have recently upgraded the country’s economic outlook.

Azour’s remarks on IMF on Pakistan’s trade outlook underscore the importance of timely economic reforms, greater regional integration, and a forward-looking strategy to mitigate risks and seize new opportunities in a rapidly evolving global trade landscape.