Pakistan has formally requested the next bailout package from the International Monetary Fund (IMF) in the amount of $6 to $8 billion under the Extended Fund Facility (EFF), with the option of augmentation through climate finance, as per local media reports.
The precise scope and duration, however, won’t be decided upon until May 2024, when a consensus has been reached on the main features of the upcoming program.
Pakistan has expressed interest in the EFF program and requested that an IMF review team be sent in May 2024 to finalize the specifics of the next three-year bailout package.
The IMF stated that Pakistan’s external buffers deteriorated, primarily reflecting ongoing debt service, including Eurobond repayments, in its most recent Regional Economic Outlook (REO), released by the Middle East and Central Asia (ME&CA) department, despite the fact that Pakistani authorities are painting a positive picture of the country’s economy.
Pakistan’s growth is predicted to recover to 2% in 2024 after declining in 2023, helped by ongoing favorable base effects in the textile and agriculture industries. Since October, Morocco’s growth estimate has been revised downward by 0.5 percentage points to 3.1%, mostly due to a slowdown in domestic demand.
Pakistan’s economy has the potential to reach $3 trillion by 2047 if the reform plan is properly executed in key sectors, as Finance Minister Muhammad Aurangzeb stated at the World Bank in Washington.
According to Aurangzeb, Pakistan has started negotiations with rating agencies to set the stage for a return to the global debt markets and aims to finalize the terms of a fresh IMF loan in May, as reported by Reuters.
