Pakistan seeks larger IMF loan amid ME war-driven economic pressures

Pakistan is preparing to formally request additional financing from the International Monetary Fund (IMF) as it seeks to cushion the economic fallout of the ongoing Middle East conflict. Officials say the government plans to expand its existing $7 billion Extended Fund Facility rather than pursue a new programme, with discussions already underway between the finance ministry and IMF leadership.

Islamabad has so far drawn about $4 billion under the programme and is expected to receive another $1 billion tranche soon, but authorities now want to access an additional $2–2.5 billion to manage external pressures.

The move comes as policymakers warn of mounting economic risks linked to the conflict, including rising energy costs, supply chain disruptions, and potential impacts on inflation, exports, and remittances. Finance Minister Muhammad Aurangzeb has raised the issue directly with IMF officials, stressing the need for support to absorb what he described as “external shocks.”

Government sources indicate there is a strong likelihood the IMF will consider increasing the loan size, as member countries collectively seek tens of billions of dollars in assistance to cope with the crisis.

Pakistan’s request follows a recent $3 billion financial injection from Saudi Arabia, which helped stabilise foreign exchange reserves after a shortfall emerged. Even so, authorities remain focused on maintaining reserves at sustainable levels in line with IMF targets.

Officials say expanding the current programme is the most viable path forward, though it could come with higher borrowing costs unless terms, such as surcharge rates or disbursement structure, are renegotiated.