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WASHINGTON: Pakistan has begun negotiations for a new multi-year IMF loan program worth “billions” of dollars with the final $1.1 billion tranche of that deal likely to be approved later this month, Finance Czar Muhammad Aurangzeb said during an interview with AFP.
Pakistan’s Finance Minister, who is on his maiden US visit to attend the spring meetings of the World Bank and negotiation with IMF for a fresh loan package invited international stakeholders to become close partners in Pakistan’s journey towards economic development.
Pakistan is nearing the end of a nine-month, $3 billion loan program with the International Monetary Fund designed to tackle a balance-of-payments crisis that brought it to the brink of default last summer, he told during an interview in Washington on Monday.
“The market confidence, the market sentiment is in much, much better shape this fiscal year,” said Aurangzeb. “It’s really for that purpose that, during this week, we have initiated the discussion with the Fund to get into a larger and extended program,” he added.
AFP citing an IMF spokesperson said that the Fund is “currently focused on the completion of the current Stand-by Agreement program,” referring to the ongoing nine-month program scheduled for completion shortly. Furthermore, an IMF spokesperson added, “The new government has expressed interest in a new program, and Fund staff stands ready to engage in initial discussions on a successor program.”
Talking about the three-year program, Pakistan’s Finance Czar said, “I do think that we will at least be requesting for a three-year program. Because that’s what we need, as I see it, to help execute the structural reform agenda.”
READ MORE: Finance Minister Aurangzeb discusses interest rates, inflation, IMF plan
“By the time we get to the second or third week of May, I do think we’ll start getting into the contours of that discussion,” he added.
Turning to the privatization program of State Owned Enterprises, the Minister said we will get to know in the next month concerning interest from prospective bidders particularly about the national airline. He said we desire to go through with that privatization and take it through the finishing line by the end of June.
The Minister expressed the confidence that if the PIA privatization goes well for the government, other companies could soon follow it.
Pakistan needs at least 3 years to implement IMF’s structural reforms
Finance Minister, Mr. Muhammad Aurangzeb while addressing the Atlantic Council on Seminar, “Opportunities and Challenges for the Pakistani Economy through 2024 and Beyond”, shared Pakistan’s roadmap to tackle economic challenges.
While talking at a seminar in Washington, the Finance Minister said that Pakistan needs two to three years to implement structural reforms prescribed by the global lender.
Finance Minister, Mr. Muhammad Aurangzeb, addressed the Atlantic Council @AtlanticCouncil today on “Opportunities and Challenges for the Pakistani Economy through 2024 and Beyond”. He shared Pakistan’s roadmap to tackle economic challenges. (1/2) pic.twitter.com/EUKit3wp8W
— Ministry of Finance, Government of Pakistan (@Financegovpk) April 16, 2024
During his talk, FM Aurangzeb outlined key measures including increasing the tax-to-GDP ratio, undertaking end-to-end digitalization of FBR, reforming SOEs, boosting exports, increasing remittances, improving the business environment, and attracting FDIs to achieve economic stabilization.
He said Pakistan is prioritizing investment in key areas of agriculture, IT, mining, and energy to enhance productivity and ensure sustainable growth. He said positive trends in industrial activity, better agriculture outlook, and improvements in the Composite Leading Indicators of Pakistan’s major export markets are signs of economic recovery.
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