New Delhi, March 9: The ongoing conflict along the Pakistan-Afghanistan border has jeopardized the next tranche of funding from the International Monetary Fund (IMF) to Pakistan, according to a media report.
An IMF team is currently visiting Pakistan to conduct the third review of the country’s economy. The release of the next funding will depend on this review. The team is assessing whether the economic decisions made by the Pakistani government align with the conditions set by the IMF, aimed at improving Pakistan’s economy and enabling it to repay its debts.
The ongoing war with Afghanistan and rising military expenditures are complicating compliance with these conditions. This situation has deteriorated the investment climate in the country and increased inflation. All these factors will be considered by the IMF team when deciding whether to extend further loans to Pakistan.
According to the report, there are essential rules for a country like Pakistan to receive assistance from the IMF, including the continuation of economic reforms, structural changes, and maintaining fiscal discipline. A large-scale war negatively impacts all these aspects and distorts the economic indicators that the IMF closely monitors.
The report also indicates that if the IMF program is halted, it could diminish investor confidence, which had significantly improved over the past year.
Additionally, the conflict with Afghanistan poses a threat to Chinese investments as well. The China-Pakistan Economic Corridor (CPEC), a massive infrastructure project worth approximately $65 billion, is a crucial part of China’s Belt and Road Initiative and traverses sensitive areas of Pakistan. Increased tensions at the border could jeopardize this project.
Meanwhile, the conflict between the U.S.-Israel and Iran has also affected oil and gas supplies in Asia. This has led to rising energy and transportation costs, further exacerbating inflation in Pakistan and putting additional pressure on its already fragile economy.
My name is Himanshu Tiwari. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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