IMF mission to visit Pakistan this month to discuss new loan

May 05, 2024 (MLN): An International Monetary Fund mission is expected to visit Pakistan this month to discuss a new program, the lender said on Sunday ahead of Islamabad beginning its annual budget-making process for the next financial year, as Reuters reported.

Pakistan last month completed a short-term $3 billion program, which helped stave off sovereign default, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer term program.

"A mission is expected to visit Pakistan in May to discuss the FY25 budget, policies, and reforms under a potential new program for the welfare of all Pakistanis," the IMF said in an emailed response to Reuters.

Pakistan's financial year runs from July to June and its budget for fiscal year 2025, the first by Sharif's new government, has to be presented before June 30.

The IMF did not specify the dates of the visit, nor the size or duration of the program.

"Accelerating reforms now is more important than the size of the program, which will be guided by the package of reform and balance of payments needs," the IMF statement said.

Pakistan narrowly averted default last summer, and its $350bn economy has stabilised after the completion of the last IMF program, with inflation coming down to around 17% in April from a record high 38% last May.

It is still dealing with a high fiscal shortfall and while it has controlled its external account deficit through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2% this year compared to negative growth last year.

Earlier, in an interview with Reuters, Finance Minister Muhammad Aurangzeb said the country hoped to agree the contours of a new IMF loan in May.

Pakistan is expected to seek at least $6bn and request additional financing from the Fund under the Resilience and Sustainability Trust.

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