An upcoming mission from the International Monetary Fund (IMF) is scheduled to visit Pakistan in May to engage in discussions regarding a potential new financial program, as announced by the IMF on Sunday.
This visit coincides with the Pakistani government’s initiation of the annual budget formulation process for the upcoming financial year, aiming to stabilize the economy and enact essential reforms.
Following the conclusion of a short-term $3 billion program last month, which helped Pakistan avert a sovereign default, Prime Minister Shehbaz Sharif’s administration is now pursuing a more comprehensive and extended agreement with the IMF to ensure sustained economic recovery and growth.
“The mission is expected to visit Pakistan in May to discuss the FY25 budget, policies, and reforms under a potential new program for the welfare of all Pakistanis,” the IMF stated in response to Reuters, without specifying the exact dates of the visit or the program’s specifics.
Pakistan’s fiscal year spans from July to June, with the budget for fiscal year 2025 required to be presented before June 30.
The IMF stressed the urgency of expediting reforms, indicating that the size and duration of the new program would be determined by the reform package and the country’s balance of payments requirements.
Pakistan’s economy, valued at approximately $350 billion, has displayed signs of stabilization following the previous IMF program, with inflation decreasing from a peak of 38 percent in May 2023 to around 17 percent in April 2024.
Nevertheless, the country continues to grapple with significant fiscal challenges and a high deficit, while growth remains stagnant due to stringent import controls.
The current growth rate is projected to hover around 2 percent this year, representing a slight improvement from the negative growth rate experienced last year.
In a recent interview with Reuters, Finance Minister Muhammad Aurangzeb expressed optimism about reaching an agreement on a new IMF program in May. Pakistan is anticipated to seek at least $6 billion in additional financing from the IMF, including funding under the Resilience and Sustainability Trust.
The impending IMF visit holds critical importance for Pakistan as it formulates its budget and endeavors to implement reforms aimed at fortifying the economy.
Discussions are likely to concentrate on fiscal discipline, economic growth, and the welfare of all Pakistanis, with a focus on achieving long-term stability and sustainability.
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