Cash-strapped Pakistan Prime Minister talks with IMF chief over new loan program

Pakistan Prime Minister Shehbaz Sharif discussed a new loan program with IMF Managing Director Kristalina Georgieva on Sunday after the two leaders met on the sidelines of the World Economic Forum in Riyadh.

This comes after the cash-strapped South Asian country signed a new and larger Long Term Extended Fund Facility (EFF) with the Fund, after its current $3 billion standby agreement expired this month. ) This was done in the midst of efforts to conclude an agreement. Prime Minister Sharif’s office said, “The two sides also agreed that Pakistan will participate in another IMF program to ensure the gains Pakistan has made over the past year and ensure that its economic growth trajectory remains favorable. We also talked about that.”

Twitter ban/X

In X, readers added context to the Pakistani Prime Minister’s post, noting that Shehbaz’s message was posted on the social media platform after it was banned in Pakistan. they write: “…the decision to impose a ban on Twitter/X in Pakistan was taken in the interest of maintaining national security, maintaining public order and preserving national integrity.”

The IMF’s executive board is scheduled to meet on Monday to discuss approving $1.1 billion in financing for Pakistan, the second and final tranche of the standby agreement. Islamabad secured the deal last summer, helping it avoid default on its sovereign debt. Pakistan’s Finance Minister Muhammad Aurangzeb said Islamabad could win staff-level agreement on the new program by early July.

Islamabad has said it is seeking at least a three-year loan to achieve macroeconomic stability and help carry out long-overdue and painful structural reforms, but Aurangzeb said the country does not know how to proceed. He has declined to elaborate on what he is trying to do to take control of the program. Islamabad has not yet made a formal request, but the fund and the government are already in talks. If secured, it will be Pakistan’s 24th IMF bailout.

The $350 billion economy faces a chronic balance of payments crisis and will have to repay nearly $24 billion in debt and interest next year, three times the central bank’s foreign exchange reserves. do. Pakistan’s Ministry of Finance forecasts economic growth of 2.6% for the fiscal year ending in June, but average annual inflation is expected to be 24%, down from 29.2% a year earlier.

(With agency opinion)