The International Monetary Fund (IMF) is set to hold an Executive Board meeting on September 25, during which Pakistan’s new loan program could receive approval.
This was confirmed by IMF Director of Communications, Julia Kozack, during a press briefing.
According to Kozack, the IMF's discussions with Pakistan were successfully concluded in July, focusing on a potential $7 billion loan package. The program aims to support Pakistan's economic reforms and stability efforts amid ongoing fiscal challenges.
“The IMF is expected to review and possibly approve the loan program for Pakistan during the board meeting on September 25,” Kozack stated, underscoring the importance of the upcoming session for the country’s financial outlook.
On the other hand, the State Bank of Pakistan (SBP) has made arrangements to address the country’s external financing gap, confirmed SBP Governor Jameel Ahmed during an analyst briefing following the recent monetary policy announcement.
The briefing, aimed at providing insights into the nation’s financial situation, highlighted ongoing efforts to stabilize the economy.
Governor Ahmed expressed optimism regarding the approval of the loan program from the International Monetary Fund (IMF), which is expected to be finalised this month. The loan is crucial for Pakistan as it faces challenges in bridging its external financing gap, which currently stands at $2 billion.
In addition to efforts with the IMF, Pakistan is in the midst of discussions with friendly nations for debt rollovers, which are expected to ease some of the financial strain. Sources indicate that these talks are progressing positively, offering further support to Pakistan’s economic recovery plan.
A spokesperson for the SBP confirmed the discussions and reiterated the government's focus on meeting the external financing requirements through a mix of debt rollovers and additional financial assistance from international partners.
Earlier in July, Pakistan reached a staff-level agreement for a new $7 billion loan deal, the International Monetary Fund said Friday, the country’s latest turn to the global lender for help in propping up its economy and dealing with its debts through big bailouts.
Pakistan, IMF agreement
The new loan deal will last for 37 months. It is aimed at strengthening fiscal and monetary policy as well as reforms to broaden the tax base, improve the management of state-owned enterprises, strengthen competition, secure a level playing field for investment, enhance human capital, and scale up social protection through increased generosity and coverage in a major welfare program, the IMF said.
“The program aims to capitalize on the hard-won macroeconomic stability achieved over the past year by furthering efforts to strengthen public finances, reduce inflation, rebuild external buffers and remove economic distortions to spur private sector-led growth,” said Nathan Porter, IMF’s mission chief to Pakistan.
