LAHORE – Pakistani government is hoping to clinch $7billion bailout from International Monetary Fund (IMF) but the lender again pushed the final approval as its Executive Board meeting schedule through September 4, 2024 is not included on the agenda.
The government officials remain hopeful that top financial agency will approve a $7 billion bailout package for Pakistan next month.
Amid the confusing situation, Finance Minister Muhammad Aurangzeb addressed concerns about the possibility of the IMF rejecting the staff-level agreement, expressing confidence that the lender will approve it next month.
Last month, Islamabad and IMF agreed on 37-month loan program, which requires approval from the IMF’s Executive Board and “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.”
Despite the absence of Pakistan’s loan approval on the current agenda, the Ministry of Finance remains optimistic that the program will receive final approval in the coming month. The government is also working to extend $12 billion in loans from friendly nations.
From brother nation Saudi Arabia, Pakistan has requested an additional $1.2 billion loan from Saudi Arabia to help close a $2 billion financing gap. The country already has $5 billion in cash deposits from Saudi Arabia, as well as $4 billion from China and $3 billion from the UAE. These amounts are in addition to $4.5 billion in commercial loans, including those from China, according to ministry officials.
The fresh talks with KSA, UAE, and China are focused on meeting Pakistan’s gross financing needs under the IMF program. After a recent trip to China to discuss energy sector debt reprofiling, Finance Minister Aurangzeb said that loan rollovers or disbursements from these long-standing allies, along with IMF financing, have previously helped Pakistan meet its external financing requirements.
The central bank’s governor projected $16.3 billion in loan rollovers for the fiscal year ending June 2025, which would cover more than half of Pakistan’s $26.2 billion external financing requirement.
While the release of the IMF’s latest schedule is noteworthy, the absence of Pakistan’s loan approval from the agenda raises concerns, as securing this loan is crucial for stabilizing the country’s struggling economy.
“In the past, there has been unnecessary speculation about the staff-level agreement not being approved, but we are confident that the IMF board will give its approval in September,” Aurangzeb told media.
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