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Pakistan negotiates fresh $6-8 billion IMF bailout to stabilise economy

An IMF support team has reached Pakistan to hold talks regarding its request for a fresh bailout package under the Extended Fund Facility (EFF)

PTI Islamabad Published 18.05.24, 04:47 PM
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Pakistan, seeking a fresh USD 6 billion to USD 8 billion loan package from the IMF, will hold talks with officials from the Washington-based lender to discuss the terms of the fresh bailout for the cash-strapped country, according to a media report on Saturday.

An IMF support team has reached Pakistan to hold talks regarding its request for a fresh bailout package under the Extended Fund Facility (EFF).

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Pakistan has made a formal request for a fresh bailout package of USD 6 to USD 8 billion under the EFF with the possibility to be augmented through climate finance. If successful, it would be the 24th IMF bailout programme for the country.

“Right now, a mission team led by Nathan Porter, our Mission Chief, is meeting with the authorities this week to discuss the next phase of our engagement with Pakistan,” International Monetary Fund's Communication Director Julie Kozack said on Thursday.

IMF’s Resident Representative for Pakistan Esther Perez Ruiz said a team, led by Porter, would meet Pakistani authorities “to discuss the next phase of engagement”.

She had further said that the aim of the negotiations was to "lay the foundation for better governance and stronger, more inclusive, and resilient economic growth that will benefit all Pakistanis", Geo News reported.

The team is expected to stay in the country for more than 10 days and would receive data from different departments and would also discuss the upcoming budget for the fiscal year 2025 with the Ministry of Finance officials, Geo News reported quoting sources.

Last Tuesday, Pakistan and the IMF started negotiations for a fresh bailout package to address the cash-strapped country's fiscal challenges and implement crucial reforms, media reports said.

Last month, Pakistan completed a short-term USD 3 billion programme with the IMF, which bailed the country out of any default.

It was unclear whether the IMF mission would end with a formal staff-level agreement for the next bailout package, according to The Express Tribune newspaper.

The duration, instrument, and size of the next IMF programme were open to discussion, the report said, quoting sources.

Pakistan narrowly averted default last summer, and the economy has stabilised after the completion of the last IMF programme, with inflation coming down to around 17 per cent in April from a record high of 38 per cent last May.

The country is still dealing with a high fiscal shortfall, and while the external account deficit has been controlled through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around two per cent this year compared to negative growth last year.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.

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