Pakistan is on track to sign a preliminary deal on a review of its loan programme with the International Monetary Fund (IMF) this week, according to Finance Minister Muhammad Aurangzeb. The agreement is a key step to secure the next $1.24 billion tranche from the IMF.
An IMF mission recently concluded its visit to Pakistan without signing a staff-level agreement (SLA) for the second review of Pakistan’s $7 billion Extended Fund Facility (EFF) and the first review of its $1.4 billion Resilience and Sustainability Facility (RSF), which were part of a 2024 agreement aimed at stabilizing the country’s economy.
Aurangzeb stated that discussions with the IMF on quantitative and structural benchmarks were productive, and follow-up talks are underway. “During the course of this week, we’re hoping that we can get the SLA done,” he told Reuters during the IMF World Bank annual meetings.
Countries under IMF programmes must pass regular reviews, which, once approved by the IMF’s executive board, trigger the release of the next funding tranche.
The IMF agreement signed in September 2024 helped stabilize Pakistan’s economy, which was facing record-high inflation, a rapidly depreciating currency, and a widening external deficit.
Aurangzeb also mentioned that Pakistan plans to issue a green Panda bond, the first in Chinese yuan, before the end of the year, and return to international markets next year with a bond sale of at least $1 billion.
On privatization, Aurangzeb highlighted progress in the sale of state assets, including three power distribution companies and national carrier Pakistan International Airlines (PIA), which is expected to become profitable for the first time since 2003.
Despite setbacks in the past, including a failed privatization attempt last year, the government has drawn interest from five domestic business groups for PIA, with final bids expected later this year.
