A three-year deal will be discussed with IMF says the Finance minister.
Islamabad
According to the new finance minister in an interview with AFP, Pakistan has started talks with the IMF about a fresh multibillion-dollar loan agreement to support its economic reform agenda.
The International Monetary Fund has been lending $3 billion to Pakistan for nine months to address a balance-of-payments crisis that nearly drove the country into default last summer. The program is almost over.
Pakistan has started talks for a new multi-year IMF loan program for “billions” of dollars, Finance Minister Muhammad Aurangzeb said in a Washington interview, with the final $1.1 billion tranche of that arrangement likely to be approved later this month.
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“This fiscal year, the market sentiment and confidence are in much, much better shape,” stated Aurangzeb, a former banker who assumed his position last month.
In order to enter a more expansive and prolonged program, he continued, “we have started the conversation with the Fund during the course of this week.
Speaking to AFP, an IMF representative stated that the organization is “currently focused on the completion of the current Stand-by Agreement program,” which is a nine-month term that is expected to end soon.
The statement continued, “The Fund staff is prepared to start initial discussions on a successor program as the new government has expressed interest in a new program.”
‘Three-year program’
Aurangzeb’s trip to Washington will also include attendance at the IMF and World Bank’s spring meetings, which begin in earnest on Tuesday and have two distinct goals: supporting the world’s most indebted countries and aiding governments in the fight against climate change.
IMF: economic team leaves for Washington
The IMF’s updated World Economic Outlook will be released to coincide with the start of the meetings, which bring together academics, representatives from the private sector, civil society, finance and development ministries, and central bankers to analyze the state of the global economy.
Allegations of electoral tampering plagued Pakistan’s February 2019 elections, resulting in the imprisonment and disqualification of opposition leader Imran Khan and the persecution of his Pakistan Tehreek-e-Insaf (PTI) party.
It is now up to the fragile alliance formed by Shehbaz Sharif to achieve an economic recovery through a series of tough austerity measures.
According to Aurangzeb, “I do believe that we will be requesting for a three-year program.” “Because we require that, as I see it, to help execute the structural reform agenda.”
“By the time we get to the second or third week of May, I do think we’ll start getting into the contours of that discussion,” he added.
Reform program
Pakistan is presently engaged in a privatization initiative aimed at divesting its state-owned businesses (SOEs) that are underperforming, as part of the structural reform agenda that was approved by the previous government. Pakistan International Airlines, the nation’s flag carrier, is the first SOE on the list.
“We will learn about potential bidders’ interest within the next month or so,” Aurangzeb stated.
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