Pakistan PM discusses new loan programme with IMF chief

Islamabad is seeking a larger long-term agreement with the fund after a current $3 billion standby arrangement expires this month

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Shehbaz Sharif speaks at the World Economic Forum (WEF) in Riyadh. — Reuters

By Reuters

Published: Sun 28 Apr 2024, 8:24 PM

Last updated: Sun 28 Apr 2024, 8:25 PM

Pakistan Prime Minister Shehbaz Sharif discussed a new loan programme with IMF Managing Director Kristalina Georgieva on Sunday, his office said in a statement.

Sharif and Georgieva met on the sidelines of the World Economic Forum in Riyadh.

Islamabad is seeking a new, larger long-term Extended Fund Facility (EFF) agreement with the fund after a current $3 billion standby arrangement expires this month.

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"Both sides also discussed Pakistan entering into another IMF programme to ensure that the gains made in the past year are consolidated and its economic growth trajectory remains positive," Sharif's office said.

The IMF executive board will meet on Monday to discuss the approval of $1.1 billion of funding for Pakistan, which is the second and last tranche of the standby arrangement.

Islamabad secured the arrangement last summer, helping it to avert a sovereign default. Pakistan's Finance Minister Muhammad Aurangzeb has said Islamabad could secure a staff-level agreement on the new programme by early July.

Islamabad says it is seeking a loan over at least three years to help achieve macroeconomic stability and execute long-overdue and painful structural reforms, though Aurangzeb has declined to detail what seize of programme the country seeks.

Islamabad is yet to make a formal request, but the Fund and the government are already in discussions.

If secured, it would be Pakistan's 24th IMF bailout.

The $350 billion economy faces a chronic balance of payments crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year - three-time more than its central bank's foreign currency reserves.

Pakistan's finance ministry expects the economy to grow by 2.6 per cent in the fiscal year ending in June, while average inflation for the year is projected to stand at 24 per cent, down from 29.2 per cent the previous fiscal year.

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Reuters

Published: Sun 28 Apr 2024, 8:24 PM

Last updated: Sun 28 Apr 2024, 8:25 PM

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