The central bank said “heightened global uncertainty surrounding trade tariffs and geopolitical developments could pose challenges” for Pakistan’s economy. The move indicates that the rate panel opted to keep a “measured monetary policy stance,” it said.
While Pakistan’s economy has stabilized and inflation has slowed considerably from its record highs in the last few months, risks from US President Donald Trump’s sweeping tariffs loom large for the crisis-ridden nation. A 29% levy on goods will hurt exports from sectors ranging from textiles to agriculture, analysts say.Pakistan’s rising tensions with neighbor India could also weigh on its economy following an attack that killed more than two dozen people in India-controlled Kashmir.
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The economy is expected to expand in the range of 2.5%– 3.5% for the current financial year ending June and will accelerate further next year, the central bank said. However, the outlook is clouded with risks from global uncertainty and unfavorable weather conditions, it added. The monetary authority also expects price gains to inch up in the coming months.
The International Monetary Fund executive board’s will meet this week to approve the next loan tranche of about $1 billion. The lender will also give its nod to a new 28-month Resilience and Sustainability Facility of around $1.3 billion. Further funding will help boost its foreign exchange reserves and help protect the economy from global disruptions.
(Edited by : Shersh Kapoor)
