Achi news desk-
- IMF official calls for speeding up economic reforms in Pakistan.
- Pakistan began negotiations with the IMF for a new loan agreement.
- Pakistan needs two to three years to implement reforms: FinMin.
LONDON: The International Monetary Fund (IMF) is ready to support Pakistan and the package of reforms is now more important than the size of the new program, the global lender’s Middle East and Central Asia director said on Thursday.
“I think what is important right now is to speed up the reforms, doubling the structure of the reforms to give Pakistan its full growth potential,” Jihad Azour told a press conference on the sidelines IMF Spring 2024 Meetings. .
The statement comes as Foreign Minister Muhammad Aurangzeb, who is currently in Washington, began negotiations with the IMF for a new multi-billion dollar loan agreement to support his economic reform programme.
Pakistan is nearing the end of a nine-month, $3-billion SBA with the IMF designed to address a balance of payments crisis, which brought it to the brink of default last summer.
With the final $1.1 billion tranche of that deal likely to be approved later this month, Pakistan began negotiations for a new multi-year IMF loan program worth “billions” of dollars, the Finance Minister said Muhammad Aurangzeb by AFP in Washington earlier this week.
In a separate interview, the finance minister said Pakistan needed two to three years to implement structural reforms prescribed by the IMF.
Pakistan does not need more policy prescriptions as it knows what it needs to keep the economy steady and that is to implement reforms, he said while speaking at the Atlantic Council think tank in Washington on Tuesday.
“We have known what and why not for years but for decades. […] It is time for us to start moving the process of implementing these aspects and why we are looking for a larger and extended programme, so once we implement it we will need a period of two to three years to go through the structural reforms. ,” said Aurangzeb.
Last week, IMF chief Kristalina Georgieva said Pakistan was in talks with the global lender on a possible follow-on program to its nine-month SBA of $3 billion, adding that it had important issues to resolve.
Georgieva told an event at the Atlantic Council think tank, that Pakistan is successfully completing its current program with the IMF and that its economy is performing slightly better, with reserves now being built up.
The news quoting sources had reported that Pakistan had decided to apply to augment the Extended Fund Facility (EFF) through climate finance, so there was a possibility of securing a size between $6 and $8 billion in the upcoming program.
“We are going to present our argument before the management of the IMF that Pakistan has faced serious consequences of climate degradation and deserved support from the international community and donor agencies,” the publication had quoted sources earlier this month.
