Finance Minister Aurangzeb of Pakistan aims to secure IMF loan by early July, according to reports | World News

Pakistan is on track to secure a new long-term, larger loan with the International Monetary Fund (IMF) by early July, according to the country’s finance minister. The current $3 billion arrangement with the IMF, which Pakistan secured last summer to avoid a sovereign default, is set to expire in late April.

The South Asian economy, valued at $350 billion, is facing a chronic balance of payment crisis. The government is seeking a larger, long-term loan to stabilize economic activity and financial markets, enabling the execution of much-needed structural reforms. If secured, this would mark the 24th IMF bailout for Pakistan.

Finance Minister Muhammad Aurangzeb expressed optimism about reaching a staff-level agreement with the IMF by June or early July. He recently led a team to attend the IMF and World Bank’s spring meetings in Washington, where discussions were reportedly positive.

While the specifics of the new loan program are still being determined, Aurangzeb has indicated a preference for at least a three-year bailout plan. Both sides are already in discussions for the new loan, with a formal request expected once the current facility expires.

The finance minister outlined key structural reforms, including increasing the government’s tax revenue-to-GDP ratio, privatizing state-owned enterprises to reduce losses, and improving management of the debt-laden energy sector. The economy is projected to grow by 2.6% in fiscal year 2024, with inflation expected to decrease to 24% from a record high of 38% in May of last year.