������Ƶ

KARACHI: Pakistan’s central bank left its key interest rate unchanged at 11% on Wednesday, saying the inflation outlook had worsened a little due to energy price fluctuations, surprising analysts who had expected another cut.

In a Reuters poll this week, all 15 analysts said they expected the SBP to ease, with nine forecasting a 50-basis-points cut, four predicting a deeper 100-basis-points reduction and two projecting a smaller 25-basis-points cut.

The decision came as Pakistan pushes reforms under a $7 billion IMF program and a contractionary budget to curb deficits.

In its Economic Outlook Update on Tuesday, the IMF cut its growth forecast for the fiscal year ending June 2026 to 3.6%, well below the government’s 4.2% target.

“The Monetary Policy Committee (MPC) ... noted that the inflation outlook has somewhat worsened in the wake of higher than anticipated adjustment in energy prices, especially gas tariffs,” the State Bank of Pakistan (SBP) said in a statement.

The panel also noted that the trade deficit was expected to widen further in the fiscal year ending June 2026 amid a pickup in economic activity and a slowdown in global trade.

“Given this macroeconomic outlook and the emerging risks, the MPC considered today’s decision as necessary to ensure price stability,” it said.

The SBP had held rates in June after a 100-basis-points cut in May that resumed easing following a March pause. Since June 2024, it has lowered its policy rate by 1,100 basis points from a record 22% as price pressures receded.

Headline inflation slowed to 3.2 % in June and is projected at 3.5%–4.5% in July, within the SBP’s 5.5%–7.5% target range for the fiscal year ending June 2026.

The government says the economy has stabilized, but analysts warn growth remains fragile and global commodity price swings could still add pressure on prices and external balances.

ISLAMABAD: Pakistan’s National Assembly Speaker (NA) Sardar Ayaz Sadiq has warned that the credibility of the United Nations system is under threat, according to an official statement on Wednesday, as he called for a return to multilateralism to address long-standing conflicts in places like Palestine and Kashmir.

Speaking at the 6th World Conference of Speakers of Parliament in Geneva, Sadiq said the international system was being undermined by populism, unilateralism and the politicization of humanitarian principles.

He stressed the need for diplomacy and institutional reform to restore global trust in the system.

“The world has witnessed enough bloodshed,” Sadiq told parliamentary leaders from around the globe. “It is time for new thinking, time to embrace pluralism, time to respect diversity and time for a new beginning.”

Citing the UN Security Council’s failure to resolve protracted disputes around the world, he said peaceful conflict resolution must now be treated not only as a legal obligation, but a strategic imperative.

Coercion and unilateral action, he added, cannot deliver sustainable peace.

Sadiq evoked Geneva’s historic role as the heart of diplomacy, recalling that the city had been the birthplace and graveyard of the League of Nations.

He maintained today’s multilateral institutions risk a similar fate if they continue to be undermined by narrow nationalism and hegemonic politics.

The NA speaker praised the unanimous adoption of UN Security Council Resolution 2788, led by Pakistan during its recent presidency, which calls for strengthening global mechanisms for peaceful dispute settlement through mediation, arbitration, judicial action and diplomatic engagement.

Turning to the global economy, he said over 100 developing countries are facing debt distress or liquidity crises, highlighting what he described as systemic shortcomings in the international financial and trade architecture.

Sadiq called for urgent reforms to build a fairer, development-oriented global financial system that supports the Global South, enhances economic resilience and reduces inequality.

He also reiterated Pakistan’s longstanding call to reform and democratize the UN Security Council, making it more representative, accountable and transparent.

Only such reform, he added, can help restore trust in multilateralism and enable the global system to meet the challenges of the 21st century.