Pakistan heading for major 3-year loan deal with IMF, says finance minister

Federal Finance Minister Muhammad Aurangzeb has announced that Pakistan is going to enter “a major loan programme” with the International Monetary Fund (IMF) as the country cannot move forward until the government get space to implement policies, reported 24NewsHD TV channel.

Talking to newsmen after addressing a ceremony at the Pakistan Stock Exchange (PSX) in Karachi on Thursday, Aurangzeb said the inflation rate is coming down gradually and country’s current account is also better.

Responding to a question, the finance minister said the outsourcing of airports is at an advanced stage.

The minister said the government will hold detailed talks with IMF officials on April 14-15 in Washington. “The exchange rate is stable and hopefully it will improve gradually and the economy will be back on its feet soon,” he added.

The minister said work is going on for the privatization of Pakistan International Airlines (PIA) and the power distribution companies (Discos).

Earlier delivering a speech at the Gong ceremony in the Pakistan Stock Exchange, Aurangzeb said the current account deficit had remained in surplus throughout February. He also highlighted the pivotal role played by the stock market in driving economic improvement, underlining its importance in stimulating investment and bolstering overall economic activity.

The minister also mentioned the ongoing discussions with the IMF, signalling the government's commitment to securing support and guidance for economic reform initiatives.

The minister expressed the confidence in the effectiveness of the government's economic policies, which he claimed would contribute significantly to improving the economy. He also credited the measures taken during the caretaker government period as instrumental in laying the groundwork for future progress.

Highlighting the engagements with the IMF, he revealed plans for meetings with the organisation in Washington in the coming days. "We are heading towards a major programme with the IMF and will maintain microeconomic stability with it. We will need a three-year programme with the IMF," he remarked, adding that the talks with the Fund were scheduled for April 14 and 15 in Washington.

The minister reaffirmed that the government was working day and night to expedite the privatisation process. He also cited encouraging progress in the privatisation of Pakistan International Airlines (PIA). Additionally, he mentioned that privatizing distribution companies (Discos) was also being considered as part of broader endeavours. "Discos will be taken towards privatisation by working on them,” he asserted. 

Aurangzeb further stressed that electricity theft had to be reduced, as there was an estimated Rs500 billion worth of power being stolen. "The government will provide the policy, and the private sector will execute it," he said and added the best harvest of rice and wheat had been achieved. 

Furthermore, the minister said that the outsourcing of airports was at an advanced stage, while the tax-to-GDP ratio of 9% would be taken to 15%."We have to end the economic leakages," he said and added the amount of leakage is Rs3 trillion, and even if half of this was achieved, it would be encouraging. 

"If the leakages are stopped, the additional money will be spent on public projects," Aurangzeb said. 

The minister also noted the improvement in the banking sector, and reminded the people that the government's Ramazan package had been increased from Rs7 to Rs12 billion. "We have to reduce the government's expenses," he announced. 

He also expressed optimism that the inflation rate would drop, and hoped the interest rate would also decrease correspondingly. "Inflation will gradually come down in the country," he claimed. 

Aurangzeb said work on the restructuring of the Federal Board of Revenue was going on by a committee that he himself was heading.