Pakistan has commenced discussions with the International Monetary Fund (IMF) regarding a new multi-billion dollar loan agreement aimed at supporting its economic reform program, announced Muhammad Aurangzeb, the Federal Minister for Finance and Revenue.
With the final $1.1 billion tranche of the Standby Arrangement (SBA) set to be approved later this month, Pakistan has embarked on negotiations for a new multi-year IMF loan program worth “billions” of dollars, Minister Aurangzeb revealed in an interview with a foreign news agency.
“The market confidence, the market sentiment is in much, much better shape this fiscal year,” Aurangzeb stated, highlighting the improved economic conditions. “It’s really for that purpose that, during the course of this week, we have initiated discussions with the Fund to enter into a larger and extended program.”
During his visit to Washington, Aurangzeb is scheduled to attend the spring meetings organized by the IMF and World Bank, commencing on Tuesday. The meetings aim to address two primary objectives: combatting climate change and assisting the world’s most indebted nations. The IMF’s publication of its updated World Economic Outlook will mark the start of the meetings.
“I do think that we will at least be requesting a three-year program,” Aurangzeb affirmed, emphasizing the need for a longer-term commitment to facilitate the execution of structural reforms. “By the time we get to the second or third week of May, I do think we’ll start getting into the contours of that discussion.”
Addressing Pakistan’s trading relationships with the United States and China, the minister underscored the significance of both partnerships. He emphasized the critical role of the United States as Pakistan’s largest trading partner and expressed appreciation for its support and investments. Aurangzeb also acknowledged China’s substantial contributions, particularly through the China Pakistan Economic Corridor (CPEC), a major infrastructure project spanning nearly 1,860 miles.
As part of the structural reform program initiated by the previous government, Pakistan is actively pursuing a privatization drive to divest its underperforming state-owned enterprises (SOEs). The privatization of Pakistan International Airlines (PIA) is among the key initiatives, with Aurangzeb stating that prospective bidders’ interest would be known in the coming month.
“If the PIA privatization progresses smoothly, other companies could soon follow,” Aurangzeb remarked, highlighting the government’s commitment to accelerating the privatization process over the next couple of years.
The ongoing discussions with the IMF and the government’s reform agenda reflect Pakistan’s efforts to address economic challenges and foster sustainable growth in collaboration with international partners.