IMF chief says Pakistan seeking potential follow-up loan program

April 11, 2024 (MLN): Pakistan is in discussions with the International Monetary Fund on a potential follow-up program to its nine-month, $3 billion stand-by arrangement, IMF chief Kristalina Georgieva said on Thursday, adding that it had important issues to solve, as Reuters reported.

Georgieva told an event at the Atlantic Council think tank, that Pakistan was successfully completing its existing program with the IMF and its economy was performing somewhat better, with reserves now being built up.

"There is a commitment to continue on this path, and the country is turning to the fund for potentially having a follow-up program," Georgieva said, flagging issues that the struggling South Asian nation still needed to address.

"There are very important issues to be solved in Pakistan: the tax base, how the richer part of society contributes to the economy, the way public spending is being directed and of course, creating ... a more transparent environment."

Pakistan and the IMF last month reached a staff-level agreement on the second and last review of the $3bn stand-by arrangement, which, if cleared by the global lender's board, will release about $1.1bn to the struggling South Asian nation.

The IMF's board is expected to review the matter in late April, but no firm date has been set, a spokesperson said.

Both sides have also spoken about negotiating a longer-term bailout and continuing with necessary policy reforms to rein in deficits, build up reserves and manage soaring debt servicing.

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