Pakistan seeks new medium-term loan program from IMF

March 20, 2024 (MLN): The government of Pakistan on Wednesday expressed interest in a successor medium-term Fund-supported program to permanently resolve Pakistan’s fiscal and external sustainability weaknesses, strengthening its economic recovery, and laying the foundations for strong, sustainable, and inclusive growth, as the statement issued by the fund. 

The upcoming discussions are anticipated to focus on several key objectives, including strengthening public finances through fiscal consolidation and tax base expansion, particularly in undertaxed sectors, to enhance debt sustainability and allow for increased development and social assistance spending.

Additionally, efforts will be made to restore the viability of the energy sector by implementing cost-reducing reforms, improving electricity transmission, and tackling theft.

Addressing inflation, promoting private-led activity through the removal of protectionist measures, advancing state-owned enterprise reforms, and increasing investment in human capital are also priorities aimed at fostering resilient and inclusive growth, ultimately enabling Pakistan to realize its economic potential.

The International Monetary Fund (IMF) staff and the Pakistani authorities have reached a staff-level agreement on the second and final review under Pakistan’s Stand-By Arrangement, subject to the approval of the IMF’s Executive Board.

Upon approval, Pakistan will have access to SDR 828 million which is around $1.1 billion.

The said amount will help bolster the foreign exchange reserves of Pakistan. At present, the country's FX reserves stand at $7.91bn.

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