The International Monetary Fund (IMF) has warned that Pakistan may experience a greater impact from global trade tensions than many of its regional neighbors.
Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, highlighted these concerns during a press briefing on the Regional Economic Outlook for the Middle East and Central Asia. “Of course, trade tensions will affect Pakistan relatively more than the average in the region,” he said.
While acknowledging the challenges, Azour suggested that the changing global economic landscape, characterised by evolving trade routes and economic opportunities, could also present advantages.
“I would say the impact on Pakistan directly can be offset by other measures that would allow the Pakistani economy to reposition itself in a world that is in the midst of one of the largest transformation in terms of trade, economic opportunities, and to reposition itself in order to address any risks, but also to potentially benefit from change in the trade routes,” Azour said.
On a more positive note, he acknowledged Pakistan’s progress in stabilising its macroeconomy over the past 18 months.
“Pakistan made significant progress in restoring macroeconomic stability over the last 18 months and the numbers are, for Pakistan, are showing improvement both in terms of growth as well as also in inflation that dropped from 12.6 percent last year in 2024 fiscal year to 6.5 percent this year, expected to stay at this level for next year. Debt is also stabilizing in the case of Pakistan, and recently Pakistan has been upgraded by rating agencies,” he added.
The IMF official also discussed the broader geopolitical and geo-economic transformations in the region, underscoring the need for countries to seek new trade partnerships and enhance economic cooperation within the region.
“Few countries have more exposure to U.S. trade like Pakistan or Jordan, and those are specific cases, and of course, in any change, there are opportunities,” he said.
He called for strengthening economic relationships both regionally and with neighboring countries to better navigate the changes in trade routes and connectivity.
“The Middle East and Central Asian region stands at the crossroads between East and West, and therefore trade routes, connectivity, as well as opportunities go through this region,” Azour said, adding that this would require, for countries in the region to seek new opportunities in terms of strengthening their economic relationships and trade ties with regions close to them, as well as also within countries in the region, which will call for new way of increasing connectivity and cooperation in the region.
