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Pakistan and IMF begin policy-level talks on new bailout package today

By News Desk

May 20, 2024 12:53 PM


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Pakistan's policy-level talks with the International Monetory Fund (IMF) for a new bailout package will begin today, 24News HD TV Channel reported on Monday.
According to the Ministry of Finance, Pakistan's policy-level talks with IMF will continue until May 23 and Federal Minister of Finance Muhammad Aurangzeb will represent the country.
As per the channel report, the size of the new loan program and its terms and conditions are expected to be finalized during these talks.
Pakistan was expected to seek at least $6bn and request additional financing from the Fund under the Resilience and Sustainability Trust.
The IMF mission reached Pakistan last week and discuss the FY25 budget, policies, and reforms under a potential new loan programme.
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.


News Desk


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