IMF mission to meet Pakistan authorities next week to discuss "next phase of engagement"
May 12, 2024
Islamabad [Pakistan], May 12 : The International Monetary Fund (IMF) mission is expected to meet Pakistan authorities next week to further discuss the "next phase of engagement", Dawn reported citing, an official from the global lender.
Esther Perez Ruiz, the Fund's resident representative for Pakistan said, "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."
"The aim is to lay the foundation for better governance and stronger, more inclusive, and resilient economic growth that will benefit all Pakistanis," she added.
Last month, Pakistan completed a short-term USD 3 billion programme, that helped stave off sovereign default, however, the government has highlighted the need for a fresh, longer-term programme, according to Dawn.
Moreover, last week, the IMF said that a mission was expected to visit Pakistan this month to "discuss the FY25 budget, policies, and reforms under a potential new programme for the welfare of all Pakistanis."
The USD 350 billion 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, as reported by Dawn.
However, 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 pc this year compared to negative growth last year.
Moreover, the economically-crippled country is expected to seek at least USD 6 billion and request additional financing from the Fund under the Resilience and Sustainability Trust.
Earlier on Friday, the Fund highlighted that the downside risks for the economy remain exceptionally high.
"Downside risks remain exceptionally high. While the new government has indicated its intention to continue the SBAs (standby arrangement) policies, political uncertainty remains significant," the IMF said in its staff report.
They further added that political complexities and high cost of living could weigh on policy, stating that policy slippages, together with lower external financing, could undermine the narrow path to debt sustainability and place pressure on the exchange rate, Dawn reported.
Furthermore, the IMF stressed the need for timely post-programme external financing disbursements.
