IMF warns geopolitics, costlier commodities threaten Pakistan’s outlook

ISLAMABAD: International Monetary Fund (IMF) has warned that key risks including escalating geopolitical tensions, increases in commodity prices, tightening in global financial, escalating trade measures in other trading partners, or rising social discontent could adversely affect the outlook.

The Fund in its latest report noted that the recent floods are a reminder of Pakistan’s high exposure to natural disasters and substantial climate risks. If agricultural damage exceeds initial estimates or spillovers to industry and services are larger, the outlook for activity, revenue, inflation, and the external sector could deteriorate. Larger than anticipated costs for flood recovery and reconstruction could put pressure on government expenditures.

IMF is all for maintaining prudent policies

It further stated that beyond the floods, key risks include escalating geopolitical tensions, increases in commodity prices, tightening in global financial conditions (including higher long-term interest rates), weakening of remittances or international aid, escalating trade measures in other trading partners, or rising social discontent, which could adversely affect the outlook.

Copyright Business Recorder, 2025