Pakistan has entered into discussions with the International Monetary Fund (IMF) regarding a new loan agreement worth billions of dollars to support its economic reform program, as stated by the country’s new finance minister in an interview with AFP on Monday.
The nation, in the final stages of a nine-month, $3 billion loan program with the IMF aimed at addressing a balance-of-payments crisis, is now seeking negotiations for a new multi-year loan program. Finance Minister Muhammad Aurangzeb, speaking from Washington, indicated that Pakistan has initiated talks with the IMF for a larger and extended program, given the improved market confidence and sentiment this fiscal year.
While the current Stand-by Agreement program is nearing completion, the IMF spokesperson noted that the Fund is ready to engage in initial discussions on a successor program, acknowledging the interest expressed by the new government.
During his visit to Washington, Aurangzeb will attend the IMF and World Bank spring meetings with objectives focused on addressing climate change and assisting heavily indebted nations. He also expressed the intention to request a three-year program to execute the structural reform agenda effectively.
Pakistan’s economic relationships with both the United States and China were highlighted, with Aurangzeb emphasizing the critical nature of its ties with the US while also acknowledging the significance of investments from China, particularly through the China-Pakistan Economic Corridor (CPEC).
The finance minister also discussed Pakistan’s privatization drive, with Pakistan International Airlines (PIA) being the first state-owned enterprise (SOE) targeted for privatization. He expressed hopes for the privatization process to be completed by the end of June, paving the way for the privatization of other poorly-performing SOEs in the future.
