IMF in Islamabad to hold talks on fresh bailout package for crisis-hit Pak
The cash-strapped country is urgently seeking a bailout package of US$ 6–8 billion from the Washington-based lender to put its economy back on track
An International Monetary Fund (IMF) support team reached Pakistan on Saturday (May 18) and the government of the country held talks with the team regarding its request for a fresh bailout package under the Extended Fund Facility (EFF).
Pakistan is seeking a fresh of US$ 6–8 billion loan package from the IMF and held talks with officials from the Washington-based lender to discuss the terms of the fresh bailout for the cash-strapped country, according to a media report.
Pakistan has made a formal request for a fresh bailout package of US$ 6–8 billion under the EFF with the possibility to be augmented through climate finance. If successful, it would be the 24th IMF bailout programme for the country.
IMF Mission in Islamabad
“Right now, a mission team led by Nathan Porter, our Mission Chief, is meeting with the authorities this week to discuss the next phase of our engagement with Pakistan,” IMF's Communication Director Julie Kozack said on Thursday (May 16).
IMF’s Resident Representative for Pakistan Esther Perez Ruiz said a team, led by Porter, would meet Pakistani authorities “to discuss the next phase of engagement”.
She further said that the aim of the negotiations was to "lay the foundation for better governance and stronger, more inclusive, and resilient economic growth that will benefit all Pakistanis", Geo News reported.
Bailing Pak out of default
The team is expected to stay in the country for more than 10 days and would receive data from different departments and would also discuss the upcoming budget for the fiscal year 2025 with the Ministry of Finance officials, Geo News reported quoting sources.
Last Tuesday, Pakistan and the IMF started negotiations for a fresh bailout package to address the cash-strapped country's fiscal challenges and implement crucial reforms, media reports said.
Last month, Pakistan completed a short-term US$ 3 billion programme with the IMF, which bailed the country out of any default.
Uncertainty over package
It was unclear whether the IMF mission would end with a formal staff-level agreement for the next bailout package, according to The Express Tribune newspaper. The duration, instrument, and size of the next IMF programme were open to discussion, the report said, quoting sources.
Pakistan narrowly averted default last summer, and the economy has stabilised after the completion of the last IMF programme, with inflation coming down to around 17 per cent in April from a record high of 38 per cent last May.
The country is still dealing with a high fiscal shortfall, and while the external account deficit has been controlled through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2 per cent this year compared to negative growth last year.
(With agency inputs)
