Pakistan’s Prime Minister, who is facing cash crunch, is in talks with the IMF chief on the new loan program.
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Shehbaz Sharif’s Pakistan says it is seeking a loan for at least three years to help it achieve macroeconomic stability and execute long-awaited and painful structural reforms. (Reuters/File)
Islamabad is seeking a new, larger Long-Term Extended Fund Facility (EFF) agreement with the fund after the existing $3 billion standby arrangement expires this month.
Pakistan Prime Minister Shehbaz Sharif on Sunday discussed a new loan program with IMF Managing Director Kristalina Georgieva after the two leaders met on the sidelines of the World Economic Forum in Riyadh.
This comes as the cash-strapped South Asian country is seeking a new, larger Long-Term Extended Fund Facility (EFF) agreement with the fund after the existing $3 billion standby arrangement expires this month. “The two sides also discussed Pakistan’s entry into another IMF program to ensure that the gains made over the past year are consolidated and its economic growth trajectory remains positive,” Sharif’s office said.
عهلاً and سهلاً from Saudi Arabia!I’m in #Riyadh For @wafe #SpecialMeeting24 On global cooperation, development and energy. Looking forward to important discussions on the serious challenges of our times.- Shehbaz Sharif (@CMShehbaz) 28 April 2024
ban on twitter/x
On X, readers added context to the Pakistani PM’s post, noting that Shehbaz’s message came on the social media platform after it was banned in Pakistan. He wrote: “…the decision to ban Twitter/X in Pakistan was taken in the interest of maintaining national security, maintaining public order and maintaining the integrity of our nation.”
The IMF Executive Board will meet on Monday to discuss the approval of $1.1 billion in funding for Pakistan, the second and final tranche of the standby arrangement. Islamabad secured the arrangement last summer, helping it avoid a sovereign default. Pakistan Finance Minister Muhammad Aurangzeb has said Islamabad could achieve staff-level agreement on the new program by early July.
Islamabad says it is seeking the loan over at least three years to help achieve macroeconomic stability and execute long-awaited and painful structural reforms, although Aurangzeb declined to specify. Which program does the country want to seize? Islamabad has not yet made a formal request, but the fund and the government are already in discussions. If secured, it will be Pakistan’s 24th IMF bailout.
The $350 billion economy is facing a balance of payments crisis, with debt and interest due to repay nearly $24 billion in the next financial year – more than three times its central bank’s foreign exchange reserves. Pakistan’s Finance Ministry expects the economy to grow by 2.6% in the fiscal year ending in June, while average inflation for the year is estimated at 24%, down from 29.2% in the previous fiscal year.
(with agency input)
