Middle East & Central Asia News
LAST UPDATE: June 11, 2025
IMF concludes first mission to Syria since 2009
IMF staff conducted a mission to Damascus from June 1–5, marking the first visit since 2009, to evaluate economic conditions and outline support plans.
Insight
The renewed IMF engagement signals Syria’s cautious reintegration into the global economy. A formal roadmap is being developed, focusing on rebuilding macroeconomic institutions and validating governance capacity. International debt relief—such as Gulf states clearing $15 billion in World Bank debt—has increased momentum. However, full recovery depends on sustained reforms and international backing, especially with reconstruction costs estimated between $250–400 billion.
Pakistan boosts defence budget by 20% but slashes overall spending in 2025‑26
Pakistan’s fiscal 2025‑26 budget reduces total spending by 7% (to 17.57 trn rupees), but raises defence allocation by 20% to 2.55 trn rupees (~$9 bn).
Insight
The budget reflects security priorities following recent confrontation with India, even amid economic strain. Nearly half of total outlay goes to servicing debt, limiting flexibility. The move may heighten regional military tensions and risk crowding out social investment. Analysts suggest that efficiency in defence spending will be vital to avoid exacerbating fiscal pressures while ensuring military readiness.
India Is Disrupting Indus Water Flows, Pakistan Minister Says
Pakistan’s climate minister accused India of manipulating Indus River flows via dams, withholding or releasing water in ways harmful to Pakistani crops.
Insight
The allegations underscore escalating resource tensions following India’s April suspension of the Indus Waters Treaty. Pakistan claims water supply manipulation disrupted sowing, jeopardizing food security. These accusations risk internationalizing a bilateral dispute and may prompt appeals to global forums. The situation highlights how water scarcity can become a flashpoint amid geopolitical frictions.
Iranian lawmakers accuse US and Israel of planning nuclear talks trap
Iranian parliamentarians warned that the US and Israel aim to use the upcoming nuclear negotiations in Oman as a “strategic trap” to limit Tehran’s enrichment rights and delay sanction relief.
Insight
The statement reflects deep mistrust in Washington’s intentions ahead of the sixth negotiation round. Iran emphasizes its unwavering insistence on securing uranium enrichment and permanent sanctions relief as preconditions. Contradictory statements over the meeting date—Thursday in US versus Sunday in Iran—underscore diplomatic misalignment. The rhetoric indicates a hardening posture, complicating prospects for a breakthrough agreement.
Sudanese army accuses Libya’s Haftar forces of border attack
Sudan’s army reported that Libya’s Haftar-backed paramilitary forces attacked Sudanese border posts in the Libya–Egypt–Sudan border triangle.
Insight
The army’s strong public condemnation highlights concerns over external interference in Sudan’s civil war, especially via proxy support. It underscores regional tensions involving Libya’s Haftar and UAE backing for RSF. The incident may further justify cross-border security operations by Khartoum. It also signals potential escalation with Libya, complicating peace efforts. International attention will be necessary to prevent wider regional spillover.
World Bank slashes global growth forecast as trade tensions bite
The World Bank cut its 2025 global GDP growth forecast from 2.7% to 2.3%, citing heightened trade tensions and policy uncertainty.
Insight
This downgrade reflects the wide-reaching effects of protectionist trade policies, especially new U.S. tariffs. Slower global growth will impact both advanced and emerging economies, dampening investment and commodity demand. The report warns of growing fragmentation and reduced resilience in global supply chains. Developing countries may face tighter credit and reduced fiscal space. The outlook underscores the need for global cooperation to avoid long-term economic stagnation.
