Pakistan is planning to approach the International Monetary Fund to increase the size of its existing $7 billion bailout program.
The move comes as rising tensions in the Middle East begin to impact Pakistan’s fragile economy, creating pressure on energy costs and external finances.
Discussions have taken place at the Prime Minister’s Office and the Ministry of Finance regarding the expansion of the ongoing Extended Fund Facility program.
The current IMF program is set to continue until September next year, but officials are now considering increasing its size to manage new economic challenges.
Pakistan may request an additional $2 to $2.5 billion under the same program to handle the financial strain caused by external shocks.
One major concern is a $3.5 billion gap in foreign exchange reserves after the United Arab Emirates did not fully roll over its financial support.
This shortfall has created immediate financing pressure, forcing the government to seek alternative sources to stabilize reserves.
Meanwhile, Saudi Arabia has provided relief by committing an additional $3 billion deposit and extending its previous $5 billion support.
This brings Saudi Arabia’s total cash support with Pakistan’s central bank to $8 billion, offering temporary stability to the economy.
Finance Minister Muhammad Aurangzeb has already discussed the situation with IMF officials in Washington, highlighting the impact of regional tensions.
The government is also exploring the option of front-loading funds, allowing quicker disbursement instead of phased payments to boost reserves and market confidence.
An IMF mission is expected to visit Pakistan next month for budget talks, where taxation reforms and program expansion are likely to be discussed.
Also read; Pakistan Briefs IMF on Possible Revenue Shortfall Amid Regional Tensions
