Hoping to get an aid of $1.1 billion tranche from the global financial agency next month, the Pakistan prime minister said the country needs to bring deep-rooted structural reforms with the two-three year IMF programme. 

The Pakistan prime minister’s statement came a day after the global lender said it has reached a tentative deal with Islamabad to unlock a $1.1 billion tranche of bail-out deal. It would be the final tranche of a $3 billion rescue package Pakistan secured last summer. 

It is important to note that last summer, the cash-strapped country outlined a $3 billion deal with the UN financial agency as it struggled with a balance-of-payments crisis which brought it to the brink of default. Pakistan is seeking another long-term bailout.

The IMF officials further said the latest portion of the deal is subject to board approval in late April. The deal expires on April 11.

“Pakistan’s economic and financial position has improved in the months since the first review, with growth and confidence continuing to recover on the back of prudent policy management and the resumption of inflows from multilateral and bilateral partners,” the IMF said.

However, growth is expected to be modest this year and inflation remains well above target, as Pakistan needs more policy reforms to address its “economic vulnerabilities”, the IMF added.

Another long-term bailout

The global lender further said during the review talks, that Islamabad expressed interest in another bailout, adding that the discussions on a medium-term assistance are likely to start in the next few months.

Earlier Wednesday, PM Sharif informed his cabinet that the country needed a new IMF loan, adding that increasing the tax base was mandatory for securing this deal.

“The IMF agreement will improve the country’s economy,” Finance Minister Muhammad Aurangzeb said in the cabinet briefing.  

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Published: 21 Mar 2024, 04:23 PM IST