‘Approval of $1.1bn finance for Pakistan on April 29’ is what the IMF executive board would be discussing

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%.