Finance Minister optimistic to strike IMF deal by fiscal year-end

Finance Minister Muhammad Aurangzeb on Friday expressed his optimism about striking a deal with the International Monetary Fund (IMF) by the end of this fiscal year, despite no final discussions yet. 

Aurangzeb, speaking at the Pakistan Stock Exchange, mentioned that further negotiations with the global lender would occur during the spring meetings in Washington, aiming for a more substantial and extended program. 

He said that he will visit Washington on April 14 and 15 for meetings with officials of the World Bank and the IMF. He emphasised the need for the Extended Fund Facility (EFF) to advance structural reforms, avoiding lengthy debates.

The existing $3 billion arrangement with the IMF expires on April 11, following a recent staff-level agreement for a $1.1 billion disbursement.

The minister indicated that formalisation for entering the EFF would proceed in the spring, with hopes for a staff-level agreement by fiscal year-end to maintain macroeconomic stability. 

He outlined a two-pronged strategy for implementing reforms, focusing on immediate issues and longer-term structural changes.

When questioned about the possibility of resuming trade with India, Aurangzeb stated he could not offer comments, indicating such decisions rest with the prime minister, cabinet, and Parliament, and no such proposal has been presented to him thus far.

Highlighting revenue challenges, Aurangzeb pointed to the Federal Board of Revenue’s (FBR) need for better implementation of its Track and Trace system to prevent losses. 

He also mentioned addressing Rs1.7 trillion in pending tribunal litigation, with a deadline set for resolution.

Aurangzeb stressed the importance of integrating under-taxed sectors and enhancing digitalization for transparency and improved service delivery. 

He advocated for private sector leadership in economic development, with the government providing policy support and promoting privatisation and public-private partnerships.

He also emphasized the role of Chinese investment and cooperation, particularly in expanding the capital markets and advancing the China-Pakistan Economic Corridor (CPEC) phase 2.