Pakistan and the International Monetary Fund (IMF) are set to conclude two weeks of preliminary discussions for a new loan tomorrow, following intensive talks centered around the nation’s upcoming budget, Bloomberg reported.
Rana Ihsaan Afzal Khan, a coordinator to Prime Minister Shehbaz Sharif, confirmed in an interview on Thursday that the discussions focused on budget proposals, which are scheduled to be presented to parliament next month. However, he did not specify the commencement date for the second round of talks.
Finance Minister Muhammad Aurangzeb stated that Pakistan aims to secure a staff-level agreement with the IMF for a larger and extended loan by the end of June or early July. This financial support from the Washington-based lender is crucial for Pakistan to bolster its foreign reserves and provide policymakers with the necessary leeway to revive an economy struggling with record inflation.
Historically, Pakistan’s budget has been a key instrument for implementing IMF conditions, and this time is no exception. The current program is considered one of the most stringent in recent history, compelling Pakistan to undertake several unpopular measures.
Key negotiation objectives outlined by the IMF last month include broadening the tax base, enhancing debt sustainability, ensuring the viability of the energy sector, and improving the performance of state-owned enterprises. These reforms are essential for stabilizing Pakistan’s economy and securing the much-needed financial assistance.
