Pakistan in May 2026: the most important developments in economy
Pakistan's economy in May 2026 was discussed largely against the background of the Middle East war. IMF chief Kristalina Georgieva warned on 4 and 5 May of a 'much worse outcome' for the global economy if the conflict with Iran continues into 2027. For Pakistan, the IMF's Executive Board approved financing of between $1.2 billion and $1.3 billion for its reform programme, and an IMF mission visited to discuss budget preparations. The IMF later urged that excise tax cuts be replaced with measures targeted at vulnerable households. Pakistan's economic growth was reported to be accelerating, and the country issued its first Panda bond, raising the equivalent of $250 million.
Energy supply was the main pressure. Pakistan sought spot LNG bids for two cargoes, then rejected the bids on 8 May, betting that tensions around the Strait of Hormuz would ease. It held talks with Iran on allowing more Qatari LNG through Hormuz, and Iran approved passage of a Qatari gas shipment, according to a source. On 25 May oil and LNG tankers left Hormuz for Pakistan and China. Pakistan extended emergency austerity measures until 13 June, and a drop in Gulf remittances worried Pakistani families.
Trade and investment ties were also reported. Pakistan and China signed $13 billion in deals on 12 May, and a further $1.2 billion during Prime Minister Shehbaz Sharif's visit to Beijing. Kuwait said it would explore building strategic petroleum storage in Pakistan, and Pakistan's ports were reported to offer Iran an alternative trade route to Dubai. Flydubai suspended flights to Islamabad, Lahore and Peshawar until October, citing 'operational issues'.
by WorldBrief & Maksim Micheliov | AI-generated summary
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