Finance Minister Targets Expanded IMF Deal

Finance Minister Muhammad Aurangzeb stressed the importance of a fresh agreement with the International Monetary Fund (IMF) for Pakistan’s economic stability.

He expressed the government’s goal to pursue an extended and more substantial program with the IMF, the world’s foremost lending institution.

Aurangzeb has outlined the objectives for the upcoming negotiations with the IMF review mission, aiming to expand the program to include climate financing and increase the allocated quota under the Extended Fund Facility (EFF).

This announcement coincides with the imminent review of the Stand-By Arrangement (SBA) by an IMF mission, starting on Thursday. This review holds significance for the disbursement of the remaining $1.1 billion, as the current agreement expires on March 31.

Discussions will not solely revolve around immediate disbursements but also on future assistance, as Pakistan requires sustained financing to address its economic challenges. Meeting stringent IMF conditions, such as energy price adjustments, state-owned enterprise privatization, and subsidy reductions, is crucial for accessing this support.

In a recent media briefing, Aurangzeb identified inflation as a significant public challenge. He emphasized that macroeconomic stability is vital to tackle this issue, although previous promises in this regard have not been fully realized despite implementing IMF-recommended measures.

Furthermore, the minister highlighted plans to expedite the privatization process and expressed confidence in the IMF’s release of the final $1.1 billion tranche under the current program.

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At the same time, Aurangzeb emphasized the urgency of initiating discussions for another IMF program and outlined strategies to enhance revenue collection, focusing on optimizing taxation in wholesale businesses, real estate, and agriculture sectors.