An official from the international money lender said on Sunday that an IMF envoy will meet with Pakistani authorities next week to talk about the “next phase of engagement.”
The IMF’s resident representative for Pakistan, Esther Perez Ruiz, made the following statement to Dawn.com: “Next week, authorities will meet with a mission team led by Nathan Porter, the IMF’s mission chief to Pakistan, to discuss the next phase of engagement.”
“The objective is to establish the groundwork for enhanced governance and more robust, equitable, and durable economic expansion that will serve the interests of every Pakistani,” she continued.
Pakistan finished a $3 billion short-term program last month, which prevented a sovereign default; nonetheless, the government has emphasized the necessity of a new, longer-term program.
The Fund announced last week that a mission to “discuss the FY25 budget, policies, and reforms under a potential new program for the welfare of all Pakistanis” was scheduled to visit Pakistan this month.
After the last IMF program ended, Pakistan’s $350 billion economy stabilized, and the country barely avoided default last summer. Inflation dropped from a record-breaking 38 percent in May of last year to about 17% in April.
The nation is still facing a significant budget deficit, and although import controls have helped to keep the external account deficit under control, this has come at the expense of the country’s growth, which is predicted to stagnate this year at roughly 2 percent as opposed to declining last year.
Pakistan is anticipated to apply for further funding from the Fund under the Resilience and Sustainability Trust, with a minimum request of $6 billion.
The Fund stated on Friday that the economy’s downside risks are still very significant. “Downside risks are still incredibly significant. In its staff report following the second and final assessment under the standby agreement, the IMF stated that “political uncertainty remains significant, even though the new government has indicated its intention to continue the SBAs (standby arrangement) policies.”
The Fund also noted that the high cost of living and political complications could have an impact on policy. It further stated that policy lapses combined with a decrease in external funding could jeopardize the debt sustainability path and put pressure on the currency rate.
Increased commodity prices, delays in shipping, or tighter global financial conditions, according to the IMF, would also negatively impact the cash-strapped country’s external stability.
The fund emphasized that post-programme external finance disbursements must be made on time.
