Pakistan has announced its intention to pursue a new loan program with the International Monetary Fund (IMF), according to sources. The decision comes under the newly-elected government led by the PML-N party.
The Ministry of Finance has already begun the necessary procedures on the instructions of the Prime Minister. The loan program is expected to be in the range of $6 to 8 billion, with negotiations with the IMF set to commence shortly. However, it is anticipated that the conditions attached to the loan will be more stringent this time around.
One of the primary reasons cited for seeking the IMF loan is the challenge of managing increasing debts and repaying existing loans. The Finance Ministry emphasizes the importance of staying within the IMF program to address revenue generation, local resource mobilization, and maintaining a balance in payments and foreign exchange reserves.
To meet the IMF’s requirements, the government may need to make difficult decisions, including potential increases in electricity and gas prices. Additionally, maintaining a stable market exchange rate will be crucial to address external financial challenges.
It is also noted that completing the existing IMF loan program is a priority, with negotiations for the second review still pending. The current short-term loan program is expected to conclude in April.
Overall, the decision to pursue a new IMF loan program reflects Pakistan’s efforts to address its economic challenges and ensure financial stability in the face of mounting debts and external pressures.
