IMF Bailout Program: Pakistan Faces Key Hurdles

International Monitory Fund (IMF) Managing Director Kristalina Georgieva highlighted that crucial issues still need resolution for Pakistan to initiate a follow-up program to the previous $3 billion stand-by arrangement.

Despite Pakistan’s significant economic improvement and progress in completing its current program, attention is required on expanding the tax base, effectively directing public spending, and enhancing transparency.

A recent staff-level agreement on the final review of the existing arrangement is anticipated to unlock approximately $1.1 billion pending board approval, slated for end-April 2024.

Both parties aim to negotiate a longer-term bailout, prioritizing policy reforms to address deficits, strengthen reserves, and manage debt.

Finance Minister Muhammad Aurangzeb remains optimistic about reaching a deal by the fiscal year’s end, with plans to delve into specifics during the IMF/WB Spring Meetings in Washington DC.

Pakistan endeavors to establish a new medium-term program lasting two to three years, aimed at tackling fiscal and external sustainability challenges, driving economic recovery, and fostering inclusive growth.