IMF, Islamabad open talks for a new loan, says Pakistan finance ministry

The country is likely to seek at least $6 billion and request additional financing from the Fund

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Pakistan Finance Minister Muhammad Aurangzeb. — Photo: Reuters file

By Reuters

Published: Mon 13 May 2024, 10:09 PM

An International Monetary Fund (IMF) mission has opened discussions with Islamabad on a new loan programme, a Pakistan finance ministry statement said on Monday.

The mission chief, Nathan Porter, met Pakistan's Finance Minister Muhammad Aurangzeb to "kick-start the discussions on further engagement with the fund".

Aurangzeb informed the team of improvements in the macro-economic indicators over the course of the standby arrangement and underscored the government's commitment to continue and expand the reform agenda, the ministry said.

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Pakistan is likely to seek at least $6 billion and request additional financing from the Fund under the Resilience and Sustainability Trust.

Ahead of the discussions, the IMF has warned that downside risks for the Pakistani economy remained exceptionally high.

The IMF team is visiting ahead of Islamabad's annual budget-making process for the next financial year, which starts on July 1.

Pakistan last month completed a short-term $3 billion programme, which helped stave off sovereign default.

Islamabad has stressed the need for a fresh, longer term programme.

The South Asian nation's $350 billion economy has stabilised after completing the standby arrangement, with inflation at around 17% in April from a record high of 38% last May.

It is still dealing with a high fiscal shortfall. It has managed its external account deficit through import controls but at the expense of stagnating growth.

The GDP growth is expected to be around 2 per cent this year ending June 30 compared to negative growth last year.

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Reuters

Published: Mon 13 May 2024, 10:09 PM

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