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IMF to Visit Pakistan for Discussions on New Programme

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The International Monetary Fund (IMF) has confirmed that a team from the organisation will visit Pakistan this month to discuss a new programme. The move comes ahead of the country’s annual budget-making process for the next financial year. The Pakistani government completed a short-term $3bn programme last month, which helped stave off sovereign default. However, Prime Minister Shehbaz Sharif’s administration has stressed the need for a fresh, longer-term programme. Pakistan narrowly averted default last summer, and its economy has stabilised after the completion of the last IMF programme. The government is still dealing with a high fiscal shortfall, however, and is expected to request additional financing from the Fund under the Resilience and Sustainability Trust.

In a statement to Reuters, the IMF confirmed that its team would discuss the FY25 budget, policies, and reforms under a potential new programme. The federal government’s financial year runs from July to June, and its budget for fiscal year 2025, the first under PM Shehbaz’s new government, has to be presented before June 30. The IMF did not specify the dates of the visit, nor the size or duration of the programme in its response to Reuters. However, the Fund did suggest that accelerating reforms was more important than the size of the programme, which would be guided by the package of reform and balance of payments needs.

Finance Minister Muhammad Aurangzeb has stated that Pakistan hopes to agree on the contours of a new IMF loan in May. The country is expected to seek at least $6bn from the Fund, as it deals with a high fiscal shortfall and stagnating growth. The government has controlled its external account deficit through import control mechanisms, but it has come at the expense of growth, which is expected to be around 2% this year. The IMF’s mission is expected to discuss potential reforms that could help boost growth and stabilise the economy in the long term.

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