Finance Minister Aurangzeb Seeks Three-Year Programme to Execute Structural Reforms
Pakistan’s Finance Minister Muhammad Aurangzeb has announced that the country has begun discussions with the International Monetary Fund (IMF) for a new multi-billion dollar loan agreement. Aurangzeb, currently in Washington for the spring meetings of the IMF and World Bank, stated that Pakistan intends to request at least a three-year programme to support its economic reform agenda.
The spring meetings, focusing on combating climate change and aiding heavily indebted nations, commenced on Tuesday with the release of the IMF’s updated World Economic Outlook.
The announcement comes as Pakistan, led by Prime Minister Shehbaz Sharif’s coalition government, faces the challenge of implementing unpopular austerity measures following elections earlier this year that were marred by allegations of rigging.
“We need, as I see it, to help execute the structural reform agenda,” Aurangzeb stated regarding the proposed three-year programme, emphasizing the necessity of this financial support for economic stability.
Pakistan is currently in the final stages of a nine-month, $3 billion loan programme with the IMF aimed at addressing a balance-of-payments crisis. With the final $1.1 billion tranche expected to be approved soon, Aurangzeb confirmed negotiations for a new multi-year IMF loan worth “billions” of dollars.
“The market confidence, the market sentiment is in much, much better shape this fiscal year,” Aurangzeb noted, highlighting Pakistan’s improved economic outlook.
Regarding Pakistan’s delicate position between the US-China trade rivalry, Aurangzeb stressed the importance of maintaining strong ties with both nations. He acknowledged the US as Pakistan’s largest trading partner while recognizing China’s significant investments, particularly through the China-Pakistan Economic Corridor (CPEC).
The Finance Minister also mentioned Pakistan’s ongoing privatisation drive, with Pakistan International Airlines (PIA) being the first state-owned enterprise (SOE) on the list for privatisation. Aurangzeb expressed optimism, stating, “Our desire is to go through with that privatisation and take it through the finishing line by the end of June.”
The successful privatisation of PIA could pave the way for further SOE sales, with Aurangzeb outlining plans to accelerate this process over the next couple of years.
Pakistan’s discussions with the IMF are ongoing, with Aurangzeb anticipating more details on the loan agreement in the coming weeks.
