IMF signals to ‘engage’ with Pakistan on fresh bailout. The International Monetary Fund (IMF) has extended its willingness to engage with Pakistan to address the nation’s fiscal and external stability concerns.
IMF Ready to Assist Pakistan
Julie Kozack, the IMF’s Communications Director, announced the IMF’s readiness to collaborate with Pakistan in the coming months to tackle its fiscal and external stability challenges.
She highlighted the Pakistani authorities’ expressed interest in a new IMF-supported program aimed at resolving these pressing issues and fostering inclusive growth.
Kozack emphasized the IMF’s commitment to engaging in program discussions with Pakistan.
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“The authorities have expressed interest in a successor IMF supported programme with the aim of resolving Pakistan’s fiscal and external stability challenges and laying the foundation for inclusive growth. And, of course, we stand ready to engage in programme discussions in the coming months,” said IMF’s Communications Director Julie Kozack in a press briefing on Tuesday.
Positive Outlook Amidst Economic Struggles
Despite economic difficulties, Kozack pointed out improvements in Pakistan’s economic and financial situation since the completion of the first review of the Standby Arrangement (SBA).
She noted signs of recovery in growth and confidence, expressing optimism about Pakistan’s economic prospects moving forward.
The IMF is set to release growth forecasts in the coming months as part of the World Economic Outlook.
“The staff level agreement recognises the strong programme implementation by the State Bank of Pakistan and the caretaker government in recent months, as well as the new government’s intentions for ongoing policy and reform efforts to move Pakistan from stabilisation to a strong and sustainable recovery,” said Kozack.
Path to Recovery
Following the recent staff-level agreement on the second and final review under the $3 billion SBA, Pakistani Prime Minister Shehbaz Sharif indicated that the new IMF program is anticipated to span a three-year period.
Finance Minister Muhammad Aurangzeb confirmed discussions regarding the new loan program with the IMF, scheduled for April 14 and 15 in Washington.
“New tranche of loan is likely to be received from the IMF in a few days, however, we would need another programme,” he said.
Commitment to Reforms
As IMF signals to ‘engage’ with Pakistan on fresh bailout, the IMF’s positive stance comes after the Pakistani government’s concerted efforts towards economic reforms, acknowledged by both the IMF and Pakistani authorities.
With a focus on strengthening policy frameworks and implementing structural reforms, Pakistan aims to transition from stabilization to sustainable economic growth under the proposed IMF program.
