Pakistan Still Needs to Resolve Important Issues to Unlock New Bailout Program: IMF Chief

The International Monetary Fund (IMF) Managing Director Kristalina Georgieva said important issues still remain unresolved for Pakistan to unlock a follow-up program to the previous $3 billion stand-by arrangement. She noted that while Pakistan has shown big improvement in its economy and is completing its current program, there are crucial issues that need attention. These issues include expanding the tax base, directing public spending effectively, and fostering transparency. The recent staff-level agreement on the final review of the existing arrangement is expected to release approximately $1.1 billion pending board approval, which is scheduled for end-April 2024. Both sides aim to negotiate a longer-term bailout, focusing on policy reforms to address deficits, bolster reserves, and manage debt. Finance Minister Muhammad Aurangzeb recently expressed hope for a deal by the end of the fiscal year and plans to discuss details during the IMF/WB Spring Meetings in Washington DC. Pakistan aims for a new medium-term program lasting two to three years to address fiscal and external sustainability challenges, promote economic recovery, and foster inclusive growth.