Pakistan Navigates IMF Conditions with Support from Allies
Prime Minister Shehbaz Sharif proclaimed on Wednesday that Pakistan had successfully met the “tough conditions” set by the International Monetary Fund, thanks to the assistance of Saudi Arabia, the UAE, and China. The IMF board is set to convene today to discuss the $7 billion loan program for the country.
Delays and External Financing Gap
Pakistan had reached a staff-level agreement with the IMF in July for a new loan to stabilize its fragile economy. Finance Minister Muhammad Aurangzeb had initially aimed to finalize the deal by the end of August. However, delays arose due to an external financing gap, prompting Pakistan to secure commitments from key allies and request debt reprofiling.
Optimism for Loan Program Approval
Just a day prior, the finance minister expressed optimism about securing the loan program post the IMF board meeting, reaffirming the government’s dedication to structural reforms.
Gratitude to Allies
Minister Aurangzeb expressed gratitude to Saudi Arabia, China, and the UAE for their unwavering support, especially during the final stages of meeting the IMF’s conditions. He specifically acknowledged China’s continued support and leadership in the process.
Macro-economic Improvements and Future Plans
Although Pakistan has seen improvements in its macroeconomic indicators, the government stresses the need for the 37-month-long IMF program to solidify these gains. Minister Aurangzeb emphasized the importance of building on a stable foundation to propel the country forward with necessary reforms in taxation, energy, state-owned enterprises, and privatization.