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Pakistan set to discuss IMF’s EFF in April


Pakistan IMF

WEB DESK: Pakistan’s Finance Minister, Muhammad Aurangzeb, announced on Friday that discussions regarding an Extended Fund Facility (EFF) with the International Monetary Fund (IMF) will take place next month.

The current standby arrangement of $3 billion with the IMF is set to expire on April 11. Earlier this week, both parties reached a staff-level agreement pertaining to the disbursement of the final tranche of $1.1 billion.

This comes as Pakistan aims to mitigate a looming full-scale economic crisis.

Minister Aurangzeb emphasised Pakistan’s keen interest in securing an EFF with the IMF, although the exact amount remains uncertain.

He noted that the IMF has shown receptiveness to Pakistan’s request, with significant support also coming from the United States.

Prime Minister Shehbaz Sharif, in his second term, immediately directed his finance team to initiate discussions with the IMF for an EFF.

Just recently, he stressed the necessity of another bailout package, linking it to comprehensive structural and economic reforms across the board.

PM Shehbaz emphasised the critical need for economic stability at the macro-level, stating that survival without another IMF agreement is unlikely.

He underscored the government’s commitment to a medium-term programme spanning two to three years.

The IMF has expressed readiness to assist in formulating a new economic programme for Pakistan, should the country request it.

Last summer, the IMF’s rescue package helped Pakistan avoid a sovereign default.

However, to secure this aid, Pakistan had to revise its budget and implement measures such as raising interest rates, taxes, and utility prices.

These adjustments resulted in significant challenges, including inflation peaking at 38 per cent, substantial currency depreciation, and economic contraction.

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