Pakistan aims to finalize a staff-level agreement with the International Monetary Fund (IMF) for a bailout exceeding $6 billion this month, following the fulfilment of all IMF requirements in its annual budget, according to Ali Pervaiz Malik, Pakistan’s Minister of State for Finance, Revenue, and Power.
Pakistan has set ambitious revenue targets in its budget to secure IMF approval for the loan amid growing domestic discontent over new taxation measures. Malik stated, “We hope to conclude this IMF process within the next three to four weeks,” aiming to reach a staff-level agreement before the IMF board recesses. He indicated that the size of the bailout package is anticipated to exceed $6 billion, pending IMF validation, which remains the primary focus.
“There are no major issues left to address, now that all major prior actions have been met, the budget being one of them,” stated Malik. Analysts warn that while the IMF may approve the budget, it could provoke public discontent.
“Obviously, these budget reforms are burdensome for the local economy, but the IMF program aims at stabilization,” Malik emphasized.
According to Sakib Sherani, an economist heading the private firm Macro Economic Insights, a swift agreement with the IMF is crucial to prevent pressure on Pakistan’s foreign exchange reserves and currency, especially with impending debt repayments and the consequences of earlier capital and import control measures being rolled back.
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“If delays occur, the central bank may need to temporarily reintroduce import and capital controls,” Sherani cautioned.
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