Middle East and Central Asia News
LAST UPDATE: May 23, 2025
PM Shehbaz Pledges Swift Reforms, Resolves to Benefit from World Bank Help
Prime Minister Shehbaz Sharif committed to swift economic reforms and emphasized leveraging the World Bank’s Country Partnership Framework, which aims to bring over $20 billion in development investment to Pakistan.
Insight
The government’s focus on institutional reforms and international partnerships underscores its strategy to achieve sustainable economic growth and resilience.
Pakistan to Present FY26 Annual Budget on June 2
Pakistan plans to present its annual budget for the fiscal year 2025-26 on June 2, with the economic survey scheduled for June 1. The budget will outline the government’s fiscal priorities and strategies.
Insight
The upcoming budget presentation is critical for setting economic direction, especially in the context of ongoing reforms and international financial engagements.
India to push for international financial measures against Pakistan, source says
India plans to urge the Financial Action Task Force (FATF) to re-add Pakistan to its “grey list” and will oppose upcoming World Bank funding for Pakistan, citing concerns over cross-border terrorism.
Insight
These measures reflect escalating diplomatic tensions between the two nations and India’s strategy to exert financial pressure on Pakistan.
Iran Says ‘Time to Decide’ Ahead of New Nuclear Talks With US
Iran has declared that it’s “time to decide” ahead of the fifth round of nuclear talks with the US, focusing on whether Tehran can continue uranium enrichment. Previous rounds, mediated by Oman, have been constructive, but the enrichment issue remains unresolved.
Insight
The outcome of these talks could significantly impact regional stability and global nuclear non-proliferation efforts, depending on whether a consensus on uranium enrichment is reached.
IMF delegation meets PM Shehbaz as Islamabad prepares Budget FY26
An IMF delegation met with Prime Minister Shehbaz Sharif to discuss Pakistan’s economic reforms and the upcoming FY26 budget, expressing satisfaction with the government’s progress and reaffirming support.
Insight
The meeting underscores Pakistan’s commitment to fiscal consolidation and structural reforms in line with IMF guidelines, aiming for economic stability.
Modi says Pakistan will not get water from Indian-controlled rivers
Indian Prime Minister Narendra Modi announced that Pakistan will no longer receive water from rivers under India’s control, following the suspension of the Indus Waters Treaty after a deadly attack in Kashmir.
Insight
This move escalates tensions between the two nations and could have significant implications for regional stability and water security.
No new IMF program for Egypt, Prime Minister declares
Prime Minister Mostafa Madbouly stated that Egypt will not seek a new IMF program beyond its current arrangement, aiming for a self-sustained economic system by 2026 or 2027.
Insight
This declaration reflects Egypt’s intention to achieve financial independence and reduce reliance on international loans, focusing on internal economic reforms.
Egypt central bank cuts key interest rates by 100 bps
On May 22, 2025, Egypt’s central bank reduced its key overnight interest rates by 100 basis points, lowering the deposit rate to 24% and the lending rate to 25%. This move, the second rate cut of the year, was less than the 175-basis-point reduction anticipated by analysts. The decision follows signs of accelerating economic growth and moderating inflation, which is projected to decline gradually over 2025 and 2026.
Insight
The rate cut reflects the central bank’s strategy to balance risk management with support for monetary easing and disinflation efforts, aiming to sustain economic growth while controlling inflation.
Morocco’s annual inflation slows to 0.7% in April
Morocco’s annual inflation rate slowed to 0.7% in April 2025, down from 1.2% in March. The deceleration was primarily due to a decrease in food prices, which fell by 0.7% year-on-year. Non-food prices increased by 0.9% during the same period.
Insight
The slowdown in inflation suggests improved price stability in Morocco, potentially providing room for monetary policy adjustments to support economic activity.
Morocco to spend $670 million to replenish livestock up to 2026
The Moroccan government announced a plan to invest $670 million to replenish livestock herds through 2026. This initiative aims to support the agricultural sector and ensure food security following periods of drought and livestock losses.
Insight
The investment underscores the government’s commitment to revitalizing the agricultural sector, which is crucial for the country’s economy and rural livelihoods.
Trump aide Witkoff to travel to Rome for Iran talks
U.S. special envoy Steve Witkoff is set to travel to Rome for a fifth round of nuclear negotiations with Iran, accompanied by senior State Department official Michael Anton. The talks aim to address Tehran’s nuclear program, with the U.S. insisting on the cessation of uranium enrichment—a demand Iran has firmly rejected.
Insight
The upcoming talks highlight the ongoing challenges in U.S.-Iran relations, with significant disagreements over nuclear policy potentially hindering the prospects of reaching a new agreement.
No nuclear deal if US wants to end Iran uranium enrichment, Iran foreign minister says
Iranian Foreign Minister Abbas Araqchi stated that there would be no nuclear deal if the United States insists on ending Iran’s uranium enrichment. He emphasized that enrichment is a non-negotiable right for Iran and suggested that a multinational enrichment consortium could be acceptable, provided it does not replace domestic operations.
Insight
Araqchi’s remarks underscore Iran’s firm stance on maintaining its nuclear enrichment program, posing a significant obstacle to the revival of the nuclear agreement with the U.S.
