IMF ready to ‘engage’ with Pakistan on fresh bailout

IMF ready to ‘engage’ with Pakistan on fresh bailout

In this screengrab, IMF’s Communications Director Julie Kozack can be seen addressing a press briefing. — IMF website
  • IMF stand ready to engage in programme discussions, says spox. 
  • IMF Executive Board meeting to take place later this month.
  • Fund notes improvement in “economic and financial” situation.

WASHINGTON: As the government looks for another bailout programme from the International Monetary Fund (IMF), the global lender has stated that it is ready to “engage” with Pakistan in the “coming months” to help the country resolve “fiscal and external stability challenges”.

“The authorities have expressed interest in a successor IMF supported programme with the aim of resolving Pakistan’s fiscal and external stability challenges and laying the foundation for inclusive growth. And, of course, we stand ready to engage in programme discussions in the coming months,” said IMF’s Communications Director Julie Kozack in a press briefing on Tuesday.

Kozack spoke about the fresh bailout programme in response to a question asked about the Standby Arrangement (SBA) and whether Pakistan was out of the woods economically.

The IMF communications director shared that the Executive Board meeting of the lender will take place at the end of this month to approve the disbursement of the remaining $1.1 billion of the SBA following the staff level agreement between Pakistan and IMF.

“The staff level agreement recognises the strong programme implementation by the State Bank of Pakistan and the caretaker government in recent months, as well as the new government’s intentions for ongoing policy and reform efforts to move Pakistan from stabilisation to a strong and sustainable recovery,” said Kozack.

The IMF official noted that there was an improvement in Pakistan’s “economic and financial” situation since the completion of the first review of the SBA.

“Growth and confidence are continuing to recover,” said Kozack. She added that the IMF will release growth forecasts in the coming months as part of the World Economic Outlook.

On March 20, Pakistan and the IMF struck a staff-level agreement on the second and final review under the US $3 billion SBA paving the way for the release of the last tranche from the lender.

Day after the deal was finalised, PM Shehbaz Sharif signalled that the new IMF programme was likely to be continued for three years.

“New tranche of loan is likely to be received from the IMF in a few days, however, we would need another programme,” he had said while addressing a session of the Special Investment Facilitation Council’s (SIFC) apex committee attended by civil-military leadership on March 21.

In continuation of the PM’s directives, Finance Minister Muhammad Aurangzeb, last week, said a meeting to discuss the new loan programme with the IMF was slated for April 14 and 15 in Washington.

Talking to media at the Pakistan Stock Exchange (PSX) in Karachi, the minister said the fresh programme’s features would be discussed in the forum, whereas detailed talks would be held later in Pakistan.

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