Global trade tensions may impact Pakistan more than regional peers, says IMF official

ISLAMABAD: Pakistan is likely to feel the effects of ongoing global trade tensions more sharply than other countries in the region, according to a senior official of the International Monetary Fund (IMF).

Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, made the remarks during a press briefing on the Regional Economic Outlook.

Responding to a question on how the global tariff war could affect Pakistan, Azour said that the country may experience a relatively greater impact compared to others in the region.

However, he noted that Pakistan has the potential to adapt by repositioning its economy to navigate the changing global trade landscape. He suggested that this could include adopting measures to manage risks while also taking advantage of emerging opportunities, especially those arising from shifts in trade routes and global economic patterns.

“Some countries like Pakistan and Jordan have greater exposure to trade with the US, which makes them more sensitive to these changes,” Azour said. “But with every shift, there are new opportunities. We’ve seen major geopolitical and economic transformations in recent years, and these have had widespread effects on the region.”

He pointed out that the region sits at a strategic junction between East and West, offering a unique chance to enhance trade links, boost connectivity, and build stronger economic ties both within the region and with nearby markets.

Azour also highlighted the progress Pakistan has made in stabilising its economy over the past 18 months. He said macroeconomic indicators are showing improvement, with inflation falling from 12.6 per cent in the fiscal year 2024 to 6.5 per cent this year, a level that is expected to remain stable in the coming year.

“Pakistan’s debt is also stabilising, and the country’s credit ratings have been upgraded by international agencies,” he added.

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