IMF, Pakistan open talks for new loan: finance ministry

IMF, Pakistan open talks for new loan: finance ministry

Govt is likely to seek at least $6bn and request additional financing under Resilience and Sustainability Trust

The International Monetary Fund logo is seen inside the headquarters in Washington, US, October 9, 2016. — IMF
  • IMF mission chief meets FinMin Aurangzeb to begin dialogues.
  • Aurangzeb states improvements in macro-economic indicators.
  • IMF warns downside risks for economy remained exceptionally high.

ISLAMABAD: An International Monetary Fund (IMF) mission has opened discussions with Pakistan on a new loan programme, a finance ministry statement said on Monday.

The mission chief, Nathan Porter, met Finance Minister Muhammad Aurangzeb to “kick-start the discussions on further engagement with the fund”.

Aurangzeb informed the team of improvements in the macro-economic indicators over the course of the standby arrangement and underscored the government’s commitment to continue and expand the reform agenda, the ministry said.

The government is likely to seek at least $6 billion and request additional financing from the the Washington-based lender under the Resilience and Sustainability Trust.

Ahead of the discussions, the IMF has warned that downside risks for the economy remained exceptionally high.

The IMF team is visiting ahead of Islamabad’s annual budget-making process for the next financial year, which starts on July 1.

Pakistan last month completed a short-term $3 billion programme, which helped stave off sovereign default.

Islamabad has stressed the need for a fresh, longer-term programme.

The South Asian nation’s $350 billion economy has stabilised after completing the standby arrangement, with inflation at around 17% in April from a record high of 38% last May.

It is still dealing with a high fiscal shortfall. It has managed its external account deficit through import controls but at the expense of stagnating growth.

The GDP growth is expected to be around 2% this year ending June 30 compared to negative growth last year.

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