ISLAMABAD, May 1, 2026 – The International Monetary Fund has urged Pakistan to press ahead with economic reforms to maintain stability as rising tensions in the Middle East create uncertainty across regional and global markets.
The IMF’s Resident Representative in Pakistan, Mahir Binici, said the ongoing conflict in the Middle East is expected to slow economic activity and increase risks across the Middle East, North Africa, Afghanistan and Pakistan (MENAP) region.
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Speaking at an outreach session hosted by the Sustainable Development Policy Institute in Islamabad, Binici presented findings from the IMF’s April 2026 Regional Economic Outlook Update.
He said the outbreak of war on February 28 had triggered a “severe and multifaceted shock,” disrupting energy markets, trade routes and financial conditions, particularly around the Strait of Hormuz. The disruptions have also affected global logistics and pushed up food and fertilizer prices, contributing to a sharp regional slowdown with downside risks.
For oil-importing countries such as Pakistan, Binici said the crisis has compounded existing vulnerabilities through higher import costs for energy and food, potential declines in remittances from Gulf-based workers and tighter global financial conditions.
He stressed that achieving macroeconomic stability would require rebuilding fiscal and external buffers while protecting vulnerable groups through targeted and temporary support measures rather than broad-based subsidies.
Binici noted that Pakistan’s performance under the IMF’s Extended Fund Facility programme has remained broadly on track. A staff-level agreement on the third review under the EFF and the second review under the Resilience and Sustainability Facility was reached in March, he added.
Policy priorities include maintaining fiscal discipline, ensuring a tight and data-driven monetary policy, and advancing structural reforms, he said.
Over the medium term, Binici emphasized the need to strengthen economic resilience through diversified trade routes, investment in critical infrastructure, enhanced regional cooperation and reforms to promote private sector-led inclusive growth.
Earlier, welcoming the IMF representative, Abid Qaiyum Suleri, Executive Director of SDPI, said the session aimed to assess evolving regional and global dynamics and their implications for Pakistan’s economy.
Suleri noted that the next tranche under the IMF programme remains pending approval by the Fund’s Executive Board. He said Pakistan continues to face vulnerabilities due to limited preparedness for external shocks and called for a shift from blanket subsidies to targeted and anticipatory social protection policies.
He also urged policymakers to prioritize energy sector reforms, including renegotiating capacity payments and increasing reliance on renewable energy sources.