Islamabad: Dr Mahir Binici, Resident Representative, International Monetary Fund (IMF) in Pakistan, has said that the ongoing Middle East conflict is likely to create a significant economic slowdown and heightened risks across the Middle East, North Africa, Afghanistan and Pakistan (MENAP) region.
Dr Binici was speaking at a session to present “IMF’s April 2026 Regional Economic Outlook Update regarding the MENAP region” organised here at Sustainable Development Policy Institute (SDPI).
Dr Binici said the outbreak of war on Feb 28 triggered a severe and multifaceted shock disrupting energy markets, trade routes and financial conditions, particularly around the Strait of Hormuz. These developments, he maintained, also affected global logistics, as well as food and fertiliser prices, leading to a sharp slowdown in regional growth with downside risks.
He said for oil-importing economies like Pakistan, the conflict compounded the existing vulnerabilities through higher energy and food import costs, potential decline in remittances from Gulf-based workers and tighter financial conditions. He also emphasised for achieving macroeconomic stability, rebuilding fiscal and external buffer, in addition to protecting vulnerable segments through targeted and temporary support measures instead of giving broad-based subsidies.
Appreciating that Pakistan’s performance under the IMF’s Extended Fund Facility (EFF) programme remained broadly on track, he said a staff-level agreement on the third review under the EFF and the second review under the Resilience and Sustainability Facility (RSF) had been reached in March. He further said policy priorities for Pakistan included maintaining a prudent fiscal stance, ensuring a tight and data-driven monetary policy and advancing structural reforms.
Over the medium term, Dr Binici stressed the need for strengthening economic resilience through diversified trade routes, investment in critical infrastructure, enhanced regional cooperation and reforms to promote private sector-led inclusive growth. He added that continued implementation of reforms would be crucial for Pakistan to maintain stability and navigate an increasingly volatile regional and global environment.
