The International Monetary Fund (IMF) is set to convene on April 29 to discuss the approval of a $1.1 billion disbursement for Pakistan, as announced by the fund on Wednesday. This disbursement represents the final portion of a $3 billion Stand-By Arrangement (SBA) that Pakistan secured last summer. The SBA was aimed at averting a sovereign default and is concluding at the end of this month.
Also Read:Â IMF Advocates Strengthening FBR Authority
Pakistan is currently in pursuit of a new, more substantial long-term loan from the IMF. Finance Minister Muhammad Aurangzeb has indicated that a staff-level agreement for the new program could be reached by early July. While Pakistan has not formally requested the loan yet, discussions are already underway between the IMF and the government. The proposed loan, spanning a three-year period, aims to achieve economic stability and implement significant structural reforms.
The Pakistani economy, valued at $350 billion, continues to grapple with ongoing balance of payments challenges. These challenges include approximately $24 billion in debt and interest repayment obligations due in the next fiscal year, which is nearly triple the amount of foreign currency reserves held by the central bank.
In terms of economic performance, Pakistan’s finance ministry forecasts a growth rate of 2.6% for the fiscal year ending in June. Additionally, average inflation is projected to decrease to 24%, down from 29.2% in the previous fiscal year 2023/2024.
