Latest news with #IMFExtendedFundFacility
Express Tribune
12-03-2025
- Business
- Express Tribune
Moody's upgrades Pakistan's banking sector outlook to positive
Listen to article Moody's, a global credit rating agency, has revised Pakistan's banking sector outlook from stable to positive, attributing the change to stronger financial performance and a recovery in macroeconomic conditions from last year's downturn. The agency's latest report noted that Pakistan's banks are heavily invested in government securities, holding around 50% of their total assets in sovereign bonds. The upgrade reflects a more favorable liquidity position and improved external financing conditions, in line with the government's positive credit rating trend. According to Moody's, the outlook upgrade aligns with the improved sovereign credit rating of Pakistan as banks remain highly exposed to government risk through their substantial holdings of sovereign debt. The agency noted that the country's fiscal and monetary measures, coupled with an International Monetary Fund (IMF) programme, have helped stabilise its economy. Pakistan's economy has shown signs of recovery, with Moody's forecasting a GDP growth rate of 3% for 2025, up from 2.5% in 2024 and a contraction of 0.2% in 2023. Inflation, which had surged to an average of 23% in 2024, is expected to ease significantly to around 8% in 2025. The rating agency highlighted that the 37-month, $7 billion IMF Extended Fund Facility, approved in September 2024, has provided a crucial buffer for Pakistan's external financing needs. This, along with policy reforms, has improved investor confidence and stabilised the financial sector. Despite the upgrade, Moody's warned that risks remain, particularly regarding Pakistan's high dependency on external funding, fiscal discipline, and political stability. The banking sector's exposure to government securities also poses a risk in case of any sovereign distress. Financial experts believe that while the positive outlook is a step forward, sustainable economic growth will require structural reforms, including improvements in tax collection, governance, and foreign direct investment. Moody's Investors Service has periodically adjusted Pakistan's credit rating in response to the country's evolving economic landscape. In October 2022, the agency downgraded Pakistan's sovereign credit rating from B3 to Caa1, highlighting increased government liquidity and external vulnerability risks, which were exacerbated by devastating floods that severely impacted the economy. The situation further deteriorated by March 2023, leading Moody's to lower the rating to Caa3. This decision was driven by a fragile liquidity position and critically low foreign exchange reserves, raising concerns about Pakistan's ability to meet its external debt obligations. However, by August 2024, signs of economic recovery emerged. Moody's upgraded Pakistan's rating to Caa2, reflecting improved macroeconomic conditions and the approval of a $7 billion IMF Extended Fund Facility, which bolstered the country's external financing prospects.
Express Tribune
03-03-2025
- Business
- Express Tribune
IMF mission arrives in Pakistan for economic review
Listen to article The IMF review mission has arrived in Pakistan to conduct an economic review regarding the payment of the next installment of $1 billion from the $7 billion bailout package. According to sources in the Ministry of Finance, economic review negotiations with the International Monetary Fund (IMF) will continue until March 15. In this regard, the first phase will involve technical discussions, while the second phase will focus on policy-level negotiations. Led by Nathan Porter, the 9-member IMF delegation will stay in Pakistan for almost two weeks and will also provide proposals for the upcoming budget for fiscal year 2025-2026, Express News reported. Sources have indicated that relief for salaried individuals will only be possible if the IMF gives its approval. The review mission will hold discussions with the Ministry of Finance, Ministry of Energy, Planning, and the State Bank. According to sources, the IMF delegation will also hold talks with other institutions and ministries, including the FBR, OGRA, NEPRA, and others. Earlier, adviser to the Pakistan finance minister said that the IMF will also discuss around $1 billion in climate financing for Pakistan. Advisor to Finance Minister Khurram Schehzad told Reuters that the mission would visit from February 24 to 28 for a 'review and discussion' of climate resilience funding. The disbursement will take place under the Fund's Resilience and Sustainability Trust, created in 2022 to provide long-term concessional cash for climate-related spending, such as adaptation and transitioning to cleaner energy. Pakistan made a formal request in October last year for around $1 billion in funding from the IMF under the trust, to address the nation's vulnerability to climate change. The country's economy is on a long path to recovery after being stabilised under a $7 billion IMF Extended Fund Facility it secured late last year.
Arab News
24-02-2025
- Business
- Arab News
IMF, Pakistan to open $1 billion climate financing talks today
ISLAMABAD: Pakistan and the International Monetary Fund mission will open discussions from today, Monday, for around $1 billion in climate financing for Pakistan, an adviser to the country's finance minister said. Khurram Schehzad told Reuters last week the IMF mission will visit from February 24-28 for a 'review and discussion' of climate resilience funding. The disbursement will take place under the Fund's Resilience and Sustainability Trust, created in 2022 to provide long-term concessional cash for climate-related spending, such as adaptation and transitioning to cleaner energy. Pakistan made a formal request in October last year for around $1 billion in funding from the IMF under the trust, to address the nation's vulnerability to climate change. Pakistan's Geo News TV had earlier reported that the IMF would issue the $1 billion for climate financing this week. The country's economy is on a long path to recovery after being stabilized under a $7 billion IMF Extended Fund Facility it secured late last year. 'Another IMF mission will arrive in Pakistan in the first week of March for a first review of that facility,' Schehzad said. The Global Climate Risk Index places Pakistan among the countries most vulnerable to climate change. Floods in 2022, which scientists said were aggravated by global warming, affected at least 33 million people and killed more than 1,700. The country's economic struggles and high debt burden impinged its ability to respond to the disaster.
Express Tribune
22-02-2025
- Business
- Express Tribune
IMF to send delegation to Pakistan for $7 billion loan review
Listen to article The International Monetary Fund (IMF) has announced that its review mission will visit Pakistan to negotiate the next tranche of the $7 billion loan, with discussions also set to focus on climate financing. The IMF delegation is scheduled to arrive in Pakistan in early March to conduct the first review of the ongoing loan programme. According to IMF's representative in Pakistan, Maahir Binesi, the delegation will engage in talks regarding the next installment of the loan and will also review the technical aspects of climate financing at Pakistan's request. A separate IMF mission, which will focus on climate-related financial arrangements, is expected to visit Pakistan at the end of February. During this visit, the technical team will assess the ongoing climate financing initiatives and review potential arrangements for future support. These discussions are part of Pakistan's efforts to secure financial resources to combat climate change, which has had a significant impact on the country in recent years. Moreover, IMF mission is also to arrive in Islamabad next week to discuss around $1 billion in climate financing for Pakistan, an adviser to the Pakistan finance minister said on Thursday. Advisor to Finance Minister Khurram Schehzad told Reuters that the mission would visit from February 24 to 28 for a 'review and discussion' of climate resilience funding. The disbursement will take place under the Fund's Resilience and Sustainability Trust, created in 2022 to provide long-term concessional cash for climate-related spending, such as adaptation and transitioning to cleaner energy. Pakistan made a formal request in October last year for around $1 billion in funding from the IMF under the trust, to address the nation's vulnerability to climate change. The country's economy is on a long path to recovery after being stabilised under a $7 billion IMF Extended Fund Facility it secured late last year. Another IMF mission will arrive in Pakistan in the first week of March for a first review of that facility, Schehzad said. The Global Climate Risk Index places Pakistan among the countries most vulnerable to climate change. Floods in 2022, which scientists said were aggravated by global warming, affected at least 33 million people and killed more than 1,700. The country's economic struggles and high debt burden impinged its ability to respond to the disaster.
Express Tribune
20-02-2025
- Business
- Express Tribune
IMF to visit Pakistan for talks on $1b climate financing
PM Shehbaz Sharif and IMF Managing Director Kristalina Georgieva meet on the sidelines of World Governments Summit in Dubai. PHOTO: NNI Listen to article An International Monetary Fund (IMF) mission will arrive in Islamabad next week to discuss around $1 billion in climate financing for Pakistan, an adviser to the Pakistan finance minister said on Thursday. Advisor to Finance Minister Khurram Schehzad told Reuters that the mission would visit from February 24 to 28 for a 'review and discussion' of climate resilience funding. The disbursement will take place under the Fund's Resilience and Sustainability Trust, created in 2022 to provide long-term concessional cash for climate-related spending, such as adaptation and transitioning to cleaner energy. Pakistan made a formal request in October last year for around $1 billion in funding from the IMF under the trust, to address the nation's vulnerability to climate change. The country's economy is on a long path to recovery after being stabilised under a $7 billion IMF Extended Fund Facility it secured late last year. Another IMF mission will arrive in Pakistan in the first week of March for a first review of that facility, Schehzad said. The Global Climate Risk Index places Pakistan among the countries most vulnerable to climate change. Floods in 2022, which scientists said were aggravated by global warming, affected at least 33 million people and killed more than 1,700. The country's economic struggles and high debt burden impinged its ability to respond to the disaster.
