IMF Mission to Meet Pakistan for Economic Support

Islamabad, May 12 (PTI) An IMF mission will meet authorities of cash-strapped Pakistan next week to hold discussions for laying the foundation for "better governance" and "stronger economic growth", an official said on Sunday.

Last month Pakistan completed a short-term USD 3 billion programme with the International Monetary Fund (IMF), which bailed the country out of any default.

On Friday, an advance team of the Washington-based global lender reached the cash-strapped country to hold talks after Islamabad requested a longer and larger bailout package.

“A mission team led by Nathan Porter, IMF's mission chief to Pakistan, will meet with authorities next week to discuss the next phase of engagement," said Esther Perez Ruiz, IMF's resident representative for Pakistan.

“The aim is to lay the foundation for better governance and stronger, more inclusive, and resilient economic growth that will benefit all Pakistanis,” the Dawn newspaper quoted her as saying.

Pakistan has sought the next bailout package in the range of USD 6 and USD 8 billion for three years under the Extended Fund Facility (EFF) with the possibility of augmentation through climate financing, The News International newspaper reported last month.

Meanwhile, the debt-struck country has decided to seek a rollover of around USD 12 billion debt from key allies like China in the 2024-25 fiscal year to meet a whopping USD 23 billion worth of gap in its external financing as the federal government aims to achieve budget targets before the expected arrival of the IMF team to the country.

Pakistan narrowly averted default last summer, and the economy has stabilised after the completion of the last IMF programme, with inflation coming down to around 17 per cent in April from a record high of 38 per cent last May.

The country is still dealing with a high fiscal shortfall, and while the external account deficit has been controlled through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2 per cent this year compared to negative growth last year.