Pakistan May Seek Another IMF Bailout: Finance Minister

Caretaker Finance Minister Dr Shamshad Akhtar on Thursday said a new program with the International Monetary Fund (IMF) will be discussed if she gets more time. The minister said this while talking to media persons at the Finance Division today. While acknowledging the improvement in Pakistan’s economy, she stressed the need for sustained efforts to further enhance economic conditions and highlighted the importance of Pakistan remaining in the IMF program. She said staying in the program is crucial until exports increase and local resource generation is maintained. The minister said the government may impose additional taxes on various sectors, including real estate and retailers. In the event of any shortfall in tax revenue, additional measures would be considered to meet financial obligations. She further added that for now, the government has deferred the decision to issue a $1.5 billion sovereign bond to bridge the financial gap. The finance minister was hopeful that the country’s credit rating would improve following the IMF staff-level agreement. Addressing financial inflows, she said Pakistan may receive $2 billion from the World Bank this year and another $1 billion from the Asian Development Bank (ADB), Islamic Development Bank, and the Asian Infrastructure Bank. The minister underscored the priority of completing the current IMF program and suggested that discussions for a new program with the IMF could take place if she is given more time. She added that work on the last tranche of $1.1 billion under the IMF SBA will start soon. The IMF has not set any preconditions for the second tranche of $700 million, providing a sense of flexibility in navigating the economic challenges ahead. The caretaker minister acknowledged Wednesday’s staff-level agreement as a crucial step towards stability. She said key reforms under the Standby Arrangement have positively impacted the overall business environment and instilled confidence among investors. International partners have also extended their support, acknowledging the country’s commitment to economic restructuring. She added that the government acknowledges facing external risks such as geopolitical tensions, escalating commodity prices, and challenging global conditions, and efforts will continue for macroeconomic sustainability and achieve balanced growth. She outlined the following eight policy targets to help sustain the economy: Dr Akhtar expressed optimism that these policy measures will contribute to economic stability and sustained growth, addressing challenges while fostering a more resilient and prosperous future for the country.