Officials from Pakistan and the International Monetary Fund (IMF) have kickstarted their two-week-long parleys at the Finance Ministry in Islamabad by holding an introductory round regarding a new loan programme, reported 24NewsHD TV channel.
The members of the IMF team visited the Ministry on Monday for the first session and then left.
Sources said the consultations will also cover the upcoming federal budget as Pakistan hopes to finalise the new over $6 billion bailout package.
The sources further divulged that the Pakistan economic team had already completed its working regarding discussions with the IMF team and also prepared a working paper for securing extended fund facility loan programme from the IMF.
Led by Mission Chief Nathan Porter, the IMF delegation has held an introductory session with Pakistan's economic team, headed by Finance Minister Muhammad Aurangzeb.
According to sources, both sides agreed to work jointly for the betterment of the Pakistan’s economy.
During the introductory session, the IMF mission assured the Pakistani side of signing the new loan programme in consultation with the IMF Executive Board over the loan’s size and volume.
The IMF also urged the Pakistani side to whole-heartedly follow whatever proposals the Fund will convey.
The IMF mission chief, the sources said, was of the view due to political instability there were numerous challenges in the economic front. All the political parties must work in tandem for progress in the national economy, he added.
The IMF mission chief further said that economic stability is linked to political stability. The talks for new loan would be meaningful as the Fund would continue to support Pakistan, he added.
Pakistan is expecting a substantial bailout package of over $6 billion from the IMF to bolster its economy and address pressing fiscal concerns.
Key agenda items include deliberations on the extended fund facility loan programme, for which a comprehensive working paper has been prepared by the finance ministry. Additionally, the two dozen-member IMF mission will engage in consultations regarding the formulation of the national budget for the upcoming financial year.
On Sunday, the IMF's resident representative in Pakistan, Esther Perez Ruiz, confirmed that a mission of the Fund will hold talks with Pakistani officials on a new loan programme next week. According to Ruiz, the purpose of the negotiations is to lay the foundation for better and stronger governance. The IMF representative said that the parties will also discuss sustainable economic development, which will benefit all Pakistanis.
Aurangzeb hd told a pre-budget conference on Sunday that the country was seeking a bigger and larger loan programme, stressing the need for bringing structural reforms to have economic stability, warning that the country would be seeking its 25th bailout package if necessary measures were not taken to bring stability.
Pakistan last month completed a short-term $3 billion programme, which helped stave off sovereign default, but the government of Prime Minister Shehbaz Sharif had stressed the need for a fresh, longer-term programme.
In its staff report earlier this week, the IMF had acknowledged Pakistan’s economic improvement, however, it warned that the outlook remained challenging, with downside risks remaining exceptionally high.
The country narrowly had averted default last summer, and its $350 billion economy has stabilised after the completion of the last IMF programme, with inflation coming down to around 17% in April from a record high of 38% last May.
Reporter Waqas Azeem