## Pakistan Aims for New IMF Loan by July
Pakistan's Finance Minister, Muhammad Aurangzeb, announced on Tuesday that the country is aiming to secure a staff-level agreement with the International Monetary Fund (IMF) on a new, long-term loan by early July. This agreement would follow the current $3 billion arrangement with the IMF, which was secured last summer to prevent a sovereign default and is set to expire in late April.
The South Asian economy, with a GDP of $350 billion, faces a chronic balance of payment crisis. The government seeks a larger, long-term loan to stabilize economic activity and financial markets, allowing for the implementation of long-overdue structural reforms.
"We are still hoping that we get a staff-level agreement by June or early July," Aurangzeb stated at a conference in Islamabad. He expressed optimism following discussions with the IMF and World Bank during the spring meetings in Washington last week.
While the specific details of the loan's volume and tenure remain unclear, Aurangzeb previously indicated a preference for a bailout plan lasting at least three years. Both parties have confirmed ongoing discussions for the new loan, with a formal request expected after the current facility expires. The IMF board is likely to meet later this month to approve the second and final tranche of the current support scheme.
The finance minister projected economic growth of 2.6% for the fiscal year 2024, with inflation expected to decline to 24% from 29.2% in fiscal 2023. Inflation reached a record high of 38% last May.
Aurangzeb outlined key structural reforms, including increasing the government's tax revenue-to-GDP ratio to 13-14% within the next two to three years from the current level of around 9%. Additionally, the government plans to reduce losses of state-owned enterprises through privatization and improve management of the debt-laden energy sector.