Today, a delegation from the International Monetary Fund (IMF) led by Mission Chief Nathan Porter arrived at the Finance Division to officially begin discussions on a new loan program.
According to sources from NetMag, these talks are expected to last approximately two weeks. In addition to deliberating a new loan program, both parties will address the budget for the upcoming financial year.
READ MORE: Sindh Police SSP Under Scrutiny for Serving Tea at PPP Ceremony
Simultaneously, the IMF will collect data from various departments and continue negotiations with the Finance Division regarding the federal budget for the fiscal year 2024-25. Pakistan has sought a new bailout package of up to $8 billion over three years under the Extended Fund Facility, with the potential for additional climate-related financing.
Last month, Finance Minister Muhammad Aurangzeb expressed optimism about reaching a Staff-Level Agreement on a larger loan program with the IMF by June-July 2024.
In its most recent “Second and final review under the Stand-By Arrangement (SBA)”, the IMF revised down its estimate of Pakistan’s gross external financing needs to $21.044 billion for the fiscal year 2024-25, which is 5.5 percent of GDP, compared to $24.965 billion, equivalent to 7.1 percent of GDP, for the outgoing fiscal year.
IMF highlighted significant risks, including potential delays in reform implementation, high public debt and financing needs, low gross reserves, the State Bank of Pakistan’s net foreign exchange derivative position, reduced inflows, and socio-political factors, all of which could impede policy execution and undermine repayment capacity and debt sustainability.
