Islamabad: IMF Mission Arrives in Pakistan to Discuss New Loan Programme
A delegation from the International Monetary Fund (IMF) is set to arrive in Pakistan this month to engage in discussions regarding a proposed new, extensive loan program, aimed at assisting the government in addressing its looming debt repayments, as reported by ARY News on Wednesday, citing inside sources.
According to sources familiar with the matter, Pakistan and the IMF have outlined a two-phase dialogue framework, beginning with technical-level consultations followed by high-level policy negotiations.
Pakistan confronts significant economic hurdles leading up to these discussions, notably the setback of a failed tax amnesty initiative endorsed by the IMF. The scheme aimed to integrate 3.1 million traders into the tax system, a goal which remains unmet. Compounded by recent administrative changes within the Federal Board of Revenue (FBR), the IMF faces negotiations with a newly constituted, relatively inexperienced FBR team, amidst a backdrop of dwindling tax revenues.
Issues such as the failure to achieve the targeted primary budget surplus in the initial nine months of the fiscal year are expected to feature prominently on the agenda.
This development follows closely on the heels of Pakistan’s receipt of the long-awaited $1.1 billion final tranche from the IMF, marking the conclusion of the $3 billion standby arrangement.
The State Bank of Pakistan (SBP) confirmed the receipt of Special Drawing Rights (SDR) 828 million, equivalent to $1.1 billion, subsequent to the IMF Executive Board’s approval of the second review under the Stand-By Arrangement (SBA).
Further details: Pakistan Formally Requests Fresh IMF Package
Finance Minister Muhammad Aurangzeb has articulated Islamabad’s ambition to secure a staff-level agreement on the new program by early July. The Pakistani government asserts the necessity of a multi-year loan to bolster macroeconomic stability and enact overdue structural reforms, although specifics regarding the scale of the envisaged program remain undisclosed. If realized, this would mark Pakistan’s 24th IMF bailout.
