FM briefs PM on IMF talks ahead of US visit

Aurangzeb informs PM about his scheduled meetings with officials of IMF, World Bank n IMF urges Pakistan to address key challenges for new deal n Kristalina tells Atlantic Council think-tank Pakistan seeking $3b loan.


ISLAMABAD/WASHINGTON  -  Finance Minister Mu­hammad Aurangzeb called on Prime Minis­ter Shehbaz Sharif in La­hore on Friday and dis­cussed overall economic situation of the country.

The finance minis­ter informed the prime minister about his up­coming visit to the Unit­ed States and his sched­uled meetings with the officials of IMF, World Bank and other institu­tions, Radio Pakistan reported late Friday.

The development comes as IMF Manag­ing Director Kristalina Georgieva highlighted that Pakistan must re­solve critical issues to pave the way for a new bailout program fol­lowing the completion of its $3 billion stand-by arrangement. Geor­gieva acknowledged Pakistan’s significant economic progress but emphasized unre­solved concerns, includ­ing expanding the tax base, enhancing public spending efficiency, and ensuring transparency A recent staff-level agree­ment on the final review of the current arrangement is poised to unlock around $1.1 billion pending board ap­proval scheduled for end-April 2024.

Pakistan is in discus­sions with the Interna­tional Monetary Fund on a potential follow-up pro­gramme to its nine-month, $3 billion Stand-By Ar­rangement (SBA), IMF chief Kristalina Georgieva said on Thursday, adding that it had important is­sues to solve.

Georgieva told an event at the Atlantic Council think tank, that Pakistan was successfully complet­ing its existing programme 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 pro­gramme,” 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 $3 billion stand-by arrange­ment, which, if cleared by the global lender’s board, will release about $1.1 bil­lion 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.

The News reported on Tuesday that Pakistan has decided to formally ap­proach the IMF for the me­dium-term Extended Fund Facility (EFF) during the up­coming annual spring meet­ings of the Breton Wood In­stitutions (BWIs).

The size and duration of the upcoming bailout pack­age will be worked out by the IMF’s review mission expected to hold talks, prob­ably from the first week of May 2024 to finalise major contours of the upcoming bailout package. 

“We are all set to make a formal request to IMF during the upcoming an­nual spring meetings of BWIs known as the IMF and World Bank from April 15 to 20, 2024 in Washington DC as Pakistan’s delegation led by minister for finance will attend it,” top official sourc­es confirmed while talking to The News on Tuesday.

The sources said Pakistan decided to make a request for augmenting the EFF through climate finance, so there was a possibility for securing $6 to $8 billion size of the upcoming pro­gramme. 

“We are going to present our argument before the IMF management that Pa­kistan faced severe conse­quences of climate degrada­tion and deserved support from the international com­munity and donor agen­cies,” said the sources. Islamabad will make a re­quest for the EFF with the possibility of augmenting through climate finance.

ePaper - Nawaiwaqt