An International Monetary Fund (IMF) team will visit Pakistan to finalize a $6 to $8 billion Extended Fund Facility (EFF) bailout programme in mid-May.
The team, that is to spend around two weeks in the country, will outline the Pakistan’s macroeconomic and fiscal framework for the next three to four years. Pakistan plans to present its 2024-25 budget in early June, possibly including stringent measures for fiscal stabilisation.
This follows Pakistan’s formal request to the IMF last month, with discussions expected to determine the program’s size and timeframe. IMF’s support for Pakistan’s reforms, emphasized by IMF officials, aligns with efforts to accelerate reforms and ensure growth potential.
Recent engagements, including Prime Minister Shehbaz Sharif’s meeting with IMF’s Georgieva, highlight Pakistan’s proactive approach. Fiscal measures, such as considering pensions in the tax net, reflect broader strategies for fiscal sustainability.
The IMF’s proposals, likely to include taxation measures and expenditure curtailment, will be crucial for Pakistan’s fiscal consolidation. Pakistan may request augmentation through climate finance, similar to Bangladesh, and Egypt’s recent program size increase to $8 billion sets a precedent.
Overall, the upcoming discussions signify a crucial phase for Pakistan’s economic trajectory, emphasizing fiscal stability, reforms, and strategic financial partnerships for resilient growth.
