IMF bailout will roil Pakistan’s economic agenda

Subject

Likely consequences of Pakistan's imminent IMF bailout.

Significance

Pakistan appears on the brink of finalising a loan programme with the IMF, less than three years after the end of the last one, to help deal with a macroeconomic crisis. Separately, Prime Minister Imran Khan has made promises about welfare provision and job creation and his government last month launched a four-year plan to bolster economic growth.

Impacts

• Pakistan’s access to international markets will depend on extrication from a Financial Action Task Force ‘grey list’ as much as an IMF loan.
• Hiking energy tariffs to increase revenue, in line with IMF conditionality, will probably incite anti-government protests.
• Islamabad will draw closer politically and economically to Riyadh.