Pakistan seeks new IMF loan by July – FinMin

Pakistan is aiming to secure a new loan agreement with the International Monetary Fund (IMF) by early July, Reuters reported on Tuesday, citing its Finance Minister Muhammad Aurangzeb.

The new deal, if secured, would be a significant long-term programme aimed at stabilising the economy and supporting crucial reforms. This would be the 24th IMF bailout for Pakistan.

The South Asian nation, grappling with a chronic balance of payments crisis, requires a larger loan compared to the $3 billion secured last summer to avoid default. The current arrangement expires in late April.

“We are still hoping that we get a staff-level agreement by June or early July,” Aurangzeb said at a conference in Islamabad, following discussions with the IMF in Washington.

The specific loan amount and timeframe remain unclear, though the finance minister previously indicated a preference for a minimum three-year programme.

Pakistan’s economic outlook shows signs of cautious optimism. The government projects growth of 2.6 per cent for the current financial year, alongside a targeted reduction in inflation from 29.2 per cent in 2023 to 24 per cent.

Inflation had reached a record high of 38 per cent last May.

Securing a new IMF agreement and successfully implementing these reforms will be critical for Pakistan’s long-term economic health.