The Minister of State for Finance, Ali Pervez Malik, has announced Pakistan’s ambitious bid to secure a staff-level agreement with the IMF for a bailout package exceeding $6 billion by the end of this month.
This move follows Pakistan’s commitment to meeting all IMF demands in the federal budget, including stringent revenue targets despite facing public backlash over anticipated new taxes.
According to foreign media, Pakistan aims to garner IMF approval by setting challenging tax revenue goals in its budget for the fiscal year starting July 1, amounting to 130 trillion rupees ($47 billion). The budget, characterized by Minister Malik as necessary for IMF program satisfaction, targets reducing last year’s fiscal deficit from 7.4 percent to 5.9 percent.
Minister Malik emphasized that all prerequisites, including budgetary measures, have been fulfilled, signaling readiness for the IMF’s evaluation and approval. However, analysts caution that while the budget may align with IMF expectations, it risks deepening public discontent.
Acknowledging the economic burden of these reforms, Malik reiterated the stabilizing role of the IMF program amidst growing pressures on Pakistan’s foreign exchange reserves. SaqibSherani, head economist at Macroeconomic Insights, stressed the urgency of securing the IMF package to prevent potential economic volatility, including the reintroduction of import and capital controls by the central bank.
