Karachi: Mian Zahid Hussain, a prominent business leader, has welcomed the International Monetary Fund's staff-level agreement with Pakistan, which comes amid escalating regional tensions. The agreement, concluded as part of the Extended Fund Facility and the Resilience and Sustainability Facility, enables a $1.2 billion disbursement to Pakistan, providing crucial support as the country navigates a volatile economic landscape.
According to Pakistan Businessmen and Intellectuals Forum, the agreement marks a significant milestone for Pakistan, increasing total disbursements to $4.5 billion under the current IMF arrangements. Hussain acknowledged the IMF's endorsement of Pakistan's macroeconomic stability, evidenced by a primary surplus of 2.8 percent during the first half of FY2026. However, he cautioned that the ongoing US-Israel-Iran conflict, particularly the blockade of the Strait of Hormuz, threatens this stability by disrupting global oil and LNG trade.
Hussain noted the financial impact of rising oil prices on Pakistan's economy, stressing that every $10 increase in oil prices could add up to $2 billion to the annual import costs. He emphasized the importance of maintaining a tight monetary policy and market-determined exchange rate as protective measures against Middle Eastern spillovers. Additionally, he commended government efforts to expand the tax base and support vulnerable populations through the Benazir Income Support Program amidst ongoing energy-led inflation.
The business leader also highlighted the risk to $21 billion in annual remittances from the Gulf Cooperation Council and the detrimental effects of increased fertilizer and gas prices on Pakistan's agrarian economy. He called for a comprehensive economic contingency plan and adherence to stricter fiscal discipline and structural reforms mandated by the IMF to ensure debt sustainability.
Hussain concluded by emphasizing the need for Pakistan to diversify energy sources and strengthen diplomatic efforts to protect its economic interests during the regional conflict. While the IMF agreement provides a temporary reprieve, he warned of potential challenges, including global food and fuel price volatility, which could impact Pakistan's projected GDP growth of 3.2 percent.