Pakistan's economic outlook shows signs of improvement

The country classification remains unchanged in country risk class 7. However, selective reliefs are being introduced in the country policy against the background of the assessment that the risk situation has improved since the policy tightening in March 2023. Pakistan is judged to have the worst behind it and gradually to be on its way out of an economic crisis. A stabilization has begun to appear in the economy and low but positive growth is expected in 2024 - 2025. Foreign exchange reserves are low but have strengthened from previously critically low levels. The import and currency restrictions that crippled parts of the industry have been eased. It is positive that the government is aiming for a new and longer IMF program. Renewing the often friction-filled IMF cooperation is critical as the country faces large debt payments in the coming years. However, with weak government finances and buffers, stabilization is still fragile and there is a risk of new episodes of currency rationing and currency volatility.

For short term transactions, increased premiums are removed for banks.  For companies, letter of credit requirements is generally replaced with increased premiums. However, the policy for Sovereign risks and other public risks remains unchanged with the requirement for a letter of credit or bank guarantee.

For long term transactions, the policy now reopens for guarantees for banks and companies, with increased premiums for companies. However, EKN remains closed to Sovereign risks and other public buyers due to the still difficult state financial situation.