Pakistan and the International Monetary Fund (IMF) mission will start talks on Monday (today) to review the next loan programme, reported 24NewsHD TV channel.
Finance Minister Aurangzeb confirmed that the IMF team has reached Pakistan, and the two sides would begin talks for a new loan programme on Monday.
IMF will discuss the FY25 budget, policies, and reforms under a potential new programme. Pakistan was expected to seek at least $6bn and request additional financing from the Fund under the Resilience and Sustainability Trust.
Esther Perez Ruiz, the Fund resident representative for Pakistan, said earlier that the IMF mission team led by Nathan Porter will meet authorities from Monday to discuss the economic growth plan.
The IMF has already urged Pakistan to lay the foundation for better governance and stronger, more inclusive, and resilient economic growth that will benefit all Pakistanis.
Pakistan last month completed a short-term $3 billion programme, which helped stave off sovereign default, but the government stressed the need for a fresh longer-term programme.
IMF said that downside risks for the economy remain exceptionally high. “Downside risks remain exceptionally high. While the new government has indicated its intention to continue the SBAs (standby arrangement) policies, political uncertainty remains significant,” said the IMF in its staff report following the second and final review under the standby agreement.
The Fund added that political complexities and high cost of living could weigh on policy, adding that policy slippages, together with lower external financing, could undermine the narrow path to debt sustainability and place pressure on the exchange rate.
IMF also said higher commodity prices, or tighter global financial conditions, would also adversely affect external stability for the cash-strapped nation.
IMF has demanded the government speed up the process of economic reforms. It has also complained about the delay in the reforms initiated during the caretaker period.
The proposed bailout package aims at addressing various economic needs, including funding for the Extended Fund Facility (EFF) program and climate financing initiatives. The exact size of the potential loan program is expected to be determined during upcoming negotiations scheduled for next month.
Reporter: Waqas Azeem