Pakistan Desires ‘Larger and Longer’ IMF Loan Program: Finance Minister

Sat Apr 20 2024
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WASHINGTON DC: Pakistan’s Finance Minister Muhammad Aurangzeb has said that the country is seeking a “larger and longer” multi-billion-dollar loan program from the International Monetary Fund (IMF). 

Aurangzeb, who is leading a delegation to participate in IMF and World Bank meetings, refrained from specifying the exact amount Pakistan is aiming to secure with negotiations currently underway.

Asserting that the program is Pakistan’s initiative supported by the IMF, Aurangzeb emphasized that the size and duration of the program will be determined through joint meetings upon the delegation’s return to Islamabad.

Responding to queries regarding a potential revision of the National Finance Commission (NFC) award, Aurangzeb acknowledged the need for a review, particularly in light of the devolution of powers to provinces under the 18th Amendment. He indicated that discussions with provincial stakeholders would focus on expenditure sharing and incentivizing tax base expansion in sectors now under provincial jurisdiction.

Pakistan had previously entered into a short-term agreement with the IMF in 2023 to address economic challenges, and is reportedly seeking a new bailout of up to $8 billion as the current $3 billion arrangement nears expiration.

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Aurangzeb’s visit coincides with the IMF’s release of its updated World Economic Outlook, projecting Pakistan’s growth at 2 percent with a 25 percent inflation rate. The IMF has maintained a growth forecast of 3.5 percent for the next fiscal year.

Aurangzeb dismissed the likelihood of significant rupee devaluation, citing Pakistan’s robust reserves, stable currency, and growing exports as factors supporting the currency’s stability.

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During a roundtable discussion with Bloomberg in Washington, Aurangzeb outlined Pakistan’s efforts to bolster industries, agriculture, and IT sectors, aiming to achieve national growth exceeding four percent in the coming years.

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