Pakistan seeks $4.5 billion boost from global sources, excluding IMF

WEB DESK: Caretaker Federal Minister for Finance, Revenue, and Economic Affairs, Dr Shamshad Akhtar, has disclosed that Pakistan aims to secure approximately $4.5 billion from both multilateral and bilateral sources, excluding the International Monetary Fund (IMF), in the ongoing fiscal year 2023–24.

In an exclusive interview with the official flagship journal of ICMA International, Minister Akhtar outlined that the government foresees receiving over $1.6 billion from these sources during the second quarter (Q2).

Notable contributors include the Asian Development Bank, the World Bank, and the Asian Infrastructure Investment Bank, encompassing funds designated for both project-based and programme-based initiatives.

Emphasising the progress in negotiations for programme loans, Minister Akhtar affirmed that disbursements are imminent. She underscored that the country is diligently meeting its debt obligations and remains committed to maintaining this practice in the future.

Regarding the IMF programme, the minister reported the successful conclusion of the first review of the Standby Agreement, leading to the achievement of a Staff Level Agreement (SLA).

Pending approval from the IMF’s Executive Board, Pakistan is poised to gain access to SDR 525 million (equivalent to around USD 700 million).

Providing insights into the current economic situation, Minister Akhtar acknowledged that, despite challenges both domestically and globally in FY2023, stability has been achieved in the fiscal and external sectors through a combination of stabilisation measures and structural reforms.

The fiscal deficit, at 7.7 per cent of GDP, showed improvement from the previous year’s 7.9 per cent, and the current account deficit in FY2023 substantially narrowed by 87.2 per cent to $2.2 billion compared to $17.5 billion in FY2022.

Minister Akhtar highlighted the reduction in the trade deficit by 38.7 per cent in FY2023, a noteworthy improvement from the 36.4 per cent expansion observed in FY2022.

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She attributed these positive trends to the caretaker government’s strategic interventions in a challenging economic environment, emphasising the importance of careful economic planning, policy consistency, and favourable external economic conditions.

Expressing vigilance towards challenges and risks from domestic and external factors, Minister Akhtar affirmed that the government is proactively taking timely measures to address them.

Short-term actions have been implemented to counter speculation, smuggling, cartelization, and theft of publicly provided resources.

Encouragingly, regulatory agencies’ timely interventions have started yielding positive outcomes, translating the hard-earned gains on fiscal and external accounts into revitalised economic activity during the first four months of FY2024.