Web Desk
The government of Pakistan has announced that it will not extend its current International Monetary Fund (IMF) program, which is scheduled to conclude on June 30. Instead, Pakistan intends to secure a new bailout from the IMF, with preparations underway by the Ministry of Finance to seek a new loan package in August.
Special Assistant Tariq Bajwa and the Secretary of Finance are actively working on securing a new IMF loan package, according to sources. The decision not to extend the current program is driven by the imminent threat of default if Pakistan fails to secure a new loan package. The country is facing significant international payments, with approximately nine to 11 billion dollars due by December of this year. In the upcoming fiscal year’s budget, Pakistan is obligated to make payments totaling 22 to 24 billion dollars, as per sources.
Sources at the finance ministry indicate that the new loan package will be more demanding compared to the current bailout. It is expected to span over three years or more, reflecting the increased financial obligations and conditions.
Prime Minister Shehbaz Sharif has already informed the IMF’s Managing Director, Kristalina Georgieva, about Pakistan’s intention to secure a new bailout. During a recent telephone conversation with the IMF managing director, the prime minister expressed Pakistan’s willingness to sign a follow-up bailout package.
The current $6.5 billion IMF program in Pakistan has faced challenges and has not been successfully revived despite efforts made over the past seven months.
By seeking a new IMF bailout, Pakistan aims to address its financial obligations, strengthen its economic stability, and navigate the challenges posed by debt repayment and fiscal management. The negotiations for a new loan package will be crucial for Pakistan’s economic future and require careful consideration and planning.
