The International Monetary Fund said on Wednesday that its executive board would convene on April 29 to deliberate on approving a $1.1 billion lending package for Pakistan.
This month’s cash is the final installment of a $3 billion Stand-By Arrangement (SBA) with the IMF, which was obtained by the country last summer in order to prevent a sovereign default.
The country in South Asia is requesting a fresh, longer-term loan from the IMF. Muhammad Aurangzeb, Pakistan’s Finance Minister, stated Islamabad might have a staff-level consensus on the new program by the beginning of July.
Although Aurangzeb has neglected to specify the specific program in question, Islamabad has stated that it is seeking a loan for a minimum of three years in order to support macroeconomic stability and carry out long-overdue and difficult structural reforms.
Although Islamabad hasn’t submitted a formal request yet, the Fund and the government have already spoken.
Should it be approved, Pakistan will get its 24th IMF bailout.
With about $24 billion in debt and interest to pay back over the course of the upcoming fiscal year—three times more than the foreign currency reserves of its central bank—the $350 billion economy is facing a chronic balance of payment problem.
The finance ministry of Pakistan projects that the economy would expand by 2.6% in the current fiscal year, which ends in June, and that average inflation will drop to 24% from 29.2% in the fiscal year 2023/2024.
Last May, inflation shot up to a record high of 38%.
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