Pakistan seeks cash bailout as its financial woes deepen after political turmoil and devastating floods
Pakistan is in talks to release of $1.1bn (£890m) of cash from the International Monetary Fund (IMF) to help ease its financial crisis.
Pakistan’s economic woes are a culmination of years of political turmoil, a financial crisis and last year’s catastrophic floods, with its reserves only able to cover three weeks – rather than the required three months.
Inflation is also thought to stand at around 24% to 26%, according to the country’s finance ministry, and the currency has been devalued against the dollar.
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The IMF delegation will be encouraging the Pakistani government to implement bold cost-cutting measures to help it bridge its financial gap, with mission chief Nathan Porter saying: “You don’t have any other option.”
In 2019, Pakistan secured a $6bn (£4.9bn) bailout from the IMF. It got another $1bn (£811m) last year to help overcome the devastating floods, but in November the IMF suspended payments, saying the government failed to make progress on its fiscal consolidation.
In response, Ishaq Dar, the country’s finance minister, told the IMF it had made some efforts to bring its crisis under control, including increasing taxes on petrol and natural gas, and increased prices for electricity.
If released, the cash from the IMF would go towards paying its external debt to the tune of $8bn, which has to be paid by the end of June.
Backlogs at ports, factories closed and electricity blackouts
The government has stopped issuing lines of credit, causing a backlog of container ships at the port of Karachi, while industry has been battered by the currency devaluation and imports block.
Domestic investment has dried up, with textile factories partially closing due to demand, and construction projects have been delayed due to lack of investment.
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Communities flee flooding
There has also been severe energy shortages, which has hindered remaining economic activity, while companies that generate and supply energy struggle with the high costs of fuel and turn off the electricity grid to save money.
Last week the country of 243 million people was plunged into darkness after a major breakdown of the national grid, which lasted several hours – the impact was felt on schools, hospitals, businesses and industry further hindering economic activity.
The country’s economy has been faltering for many years, with the floods in 2022 pushing it over the edge.
Pakistan’s floods impacted a third of the country and wiped out millions of hectares of crops. Almost 2,000 people were killed, and around 33 million people were displaced, with damage thought to cost around $40bn (£32.4bn).
Successive governments have been accused of making little effort to widening the tax net and increasing sources of revenue, while loans from allies such as China, Saudi Arabia and the United Arab Emirates kept its economy afloat.
Fuel taxes have been increased. File pic: Reuters
Some blame former PM Imran Khan
Former prime minister Imran Khan, and his government, have been accused of contributing to the immediate crisis. A year into his premiership, the fiscal deficit shot to a record high of $25.3bn (£20.5bn) and by the time he was ousted early last year, inflation was over 12%.
Mr Khan delayed approaching the IMF, despite economists recommending it, saying he wants to shun the practice of approaching foreign entities with a “begging bowl”.
However, his government was unable to bear the costs of a slew of welfare schemes it rolled out – though it helped his popularity.
His government’s reluctance to increase fuel costs, even in early 2022 when international crude rates had breached the $100 mark due to the war in Ukraine war, meant the state exchequer lost precious dollars.
Is Pakistan going the same way as Sri Lanka?
There is comparison of what is taking place in Pakistan with the collapse of the Sri Lankan economy last year.
But this is unlikely, as almost half of Sri Lanka’s external debt was owed to private creditors while for Pakistan, this is only about 8% of what it owes.
Pakistan’s large bilateral loan payments are to friendly countries like Saudi Arabia, the UAE, and China, which will be rolled over.
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With the present government starting to implement changes that would satisfy the IMF and a release of the $1.1bn tranche, this will pave the way for the release of the loan and other bilateral assistances.
But more importantly, Pakistan is a nuclear nation and a geostrategic country, and its allies, and the world, would prevent its economy from collapsing.
In a stark and direct intervention, Martin Griffiths, the former UN humanitarian chief, has described the situation in Gaza as genocide.
The statement, made during an interview I conducted with Griffiths on The World, marks one of the most pointed accusations yet from a figure known to be deeply embedded in the world of international politics and diplomacy.
“I think now we’ve got to the point this is unequivocal. Of course it is genocide. Just as it is weaponising aid.
“We don’t need to look behind ourselves to see that’s the case. That should encourage us even more because we, of course, all doubted whether it would come to that level of definition.
“We all doubted whether famine is actually there. I think starvation is killing people. That’s bad enough. We don’t have to worry about famine, which is obviously there lurking in the shadows.
“Also, genocide… of course that’s what has happened. We only need to look at the statements made. Prime Minister Netanyahu has the virtue of being very clear about his objectives.”
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Ex-Israeli aide dismisses genocide claims
His choice of words is extraordinary – not just for its gravity, but because it’s Griffiths who is saying it.
A veteran diplomat with decades of experience navigating complex international crises, Griffiths is known for his calm and thoughtful demeanour – not for inflammatory language.
For him to use the term “genocide” in a television interview signals a significant shift in how some within the international system are now interpreting events on the ground in Gaza – 20 months since Israel launched its war.
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‘We carry our coffins with us’
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The timing is also noteworthy.
Just weeks earlier, Tom Fletcher, another respected former British ambassador and current UN humanitarian chief, came close to using the phrase during a UN Security Council session.
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He said: “What more evidence do you need now? Will you act decisively to prevent genocide and to ensure respect for international humanitarian law? Or will you say instead: ‘we did all we could?'”
Whilst he stopped short, his tone showed a clear change in how leading international figures now view the direction of Israeli military operations in Gaza; staggering civilian deaths, and the statements made by Israeli officials prosecuting this war.
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Griffiths’ remarks now go a step further.
It comes as the British government continues to grapple with public anger over the mounting civilian toll – and faces growing scrutiny over its continued arms exports to Israel.
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Children ‘should be treated in UK’
This latest statement by Griffiths doesn’t just reflect humanitarian concern.
As a former ambassador, he knows the weight his words carry.
And with the humanitarian crisis in Gaza worsening, his warning challenges Israel’s allies to ask deeply uncomfortable questions.
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Lawyers representing Israel against accusations brought by South Africa to the International Court of Justice last year – accusing its actions in Gaza of amounting to genocide – called the claims “unfounded”, “absurd” and amounting to “libel”.
They went on to say Israel respected international law and had a right to defend itself.
World
More than 40% of Europe slides into drought, including pockets of Greece, southern Italy and Spain
Well over a third of Europe, including parts of holiday destinations like Spain, Greece and Italy, are now in drought.
March was Europe’s warmest on record – a trend driven by climate change – and also saw below average rain across large parts of the north and east of the continent.
Now 41.2% of Europe finds itself in some form of drought, according to the latest update from the EU’s European Drought Observatory, which covers 11 to 20 May.
It is most acute in pockets of south-eastern Spain, Cyprus, Greece and Albania, where the strongest “alert” category has been issued, as well as parts of Poland and Ukraine.
But broad stretches of northern and eastern Europe through France, Germany, Poland and Ukraine also drying up, sowing concerns about crop yields.
On Thursday, the UK’s Environment Agency officially declared a drought in North West England after river and reservoir levels were licked away by a dry spring.
More than 40% of Europe was in drought as of 11-20 May 2025. Pic: CEMS / EDO
Heat was record high in March in Europe. The image on the right shows the south of the continent was much wetter than average and the north much drier. Source: Copernicus Climate Change Service
Greece tourism is ‘unsustainable’
In Greece, “overtourism” from millions flocking to its beaches adds further pressure to water supplies, said Nikitas Mylopoulos, professor of water resource management at Thessaly University.
“The tourist sector is unsustainable and there is no planning… leading to a tremendous rise in water demand in summer,” he told Sky News.
“The islands have an intense problem of drought and water scarcity.”
Islands like Santorini and Mykonos are now forced to ship in water from Athens or desalination plants to provide for showers and swimming pools. In the past, many residents could make do with local methods like rainwater harvesting.
But agriculture is a far bigger drain on the country’s water, with waste rife and policies lacking, said Prof Mylopoulos.
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‘Tropical nights’ soar in European hotspots
Wildfire season could be ‘particularly difficult’
This year’s hot and dry conditions are also fuelling the risk of yet another fierce wildfire season in Greece.
Last week civil protection minister Ioannis Kefalogiannis warned of a “particularly difficult” summer.
He said a record 18,000 firefighters have been deployed and the drone fleet almost doubled in a bid to combat fires being fuelled by a hotter climate.
Droughts and their causes are more complicated, but scientists at World Weather Attribution say global warming is exacerbating drought in some parts of the world, including around the Mediterranean.
A drought was declared in northwest England on Thursday. Pic: Reuters
They found the drought of 2022, which spread across the Northern Hemisphere, was made 20 times more likely by climate change.
The International Hydropower Association said drought and intense rain in Europe are pushing power plants to “operate at the limits of their existing equipment”.
Extreme weather costs the EU about €28.3bn (£23.8bn) in lost crops and livestock per year, according to insurance firm Howden.
Hayley Fowler, professor of climate change impacts at Newcastle University, said: “With global warming, we expect more prolonged and intense droughts and heatwaves punctuated by more intense rainfall, possibly causing flash floods.
“In recent years, we have experienced more of these atmospheric blocks, causing record heat and persistent drought, as well as severe flooding in other locations in Europe.
“Recent months have been no different, with prolonged dry conditions and heatwaves in northern Europe and floods in southern Europe.”
At least 117 people have died and others are still missing after heavy flooding in Nigeria, an emergency official said.
Authorities initially said 21 people had died but this figure has today risen significantly.
Media reports quoting local government officials said a dam collapse has worsened the situation.
Ibrahim Hussaini, head of Niger State Emergency Management Agency, said some 3,000 houses were underwater in two communities.
Videos posted on social media show floodwater sweeping through neighbourhoods, with rooftops barely visible above the brown currents. One clip shows a tanker floating through a town.
A tanker is swept away by floodwaters
The chairman of the Mokwa local government area suggested poor infrastructure has worsened the impact of the flooding.
Jibril Muregi has appealed to the government to start “long overdue” construction of waterways in the area under a climate resilience project.
Water appears to be flowing over a dam behind the town
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In a similar occurrence last September, torrential rains and a dam collapse in Nigeria’s northeastern Maiduguri caused severe flooding, leaving at least 30 people dead and displacing millions.
Nigeria is prone to flooding during the rainy season, which began in April – and flooding is becoming more common and extreme as the climate warms.
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Hotter air is thirstier and can hold more moisture – about 7% more for every 1C warmer – meaning it unleashes heavier flooding when it rains.
Violent rain, which killed hundreds of people in Nigeria during 2022, was made at least 80 times more likely and 20% more intense by climate change, analysis by World Weather Attribution found.
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