Kristalina Georgieva reveals ongoing discussions between Pakistan and IMF for a potential extension to the current stand-by arrangement, citing unresolved economic issues.
Washington, April 12, 2024: Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), disclosed on Thursday that Pakistan is engaged in talks with the IMF regarding a prospective follow-up program following the completion of its nine-month, $3 billion stand-by arrangement.
Speaking at an event hosted by the Atlantic Council think tank, Georgieva commended Pakistan for its progress in successfully navigating through the existing IMF program, noting improvements in the nation’s economic performance and the accumulation of reserves.
While acknowledging Pakistan’s strides, Georgieva highlighted critical challenges that still confront the South Asian nation. These include expanding the tax base, enhancing contributions from affluent segments of society, optimizing public expenditure, and fostering transparency within the economic framework.
The IMF chief emphasized that the commitment to address these issues is integral to Pakistan’s potential pursuit of a subsequent IMF program. The exact size and duration of the proposed loan will be determined by an IMF mission, with discussions underway to assess Pakistan’s economic landscape comprehensively.
Following last month’s staff-level agreement on the second review of the stand-by arrangement, which is poised to unlock approximately $1.1 billion in funding pending approval by the IMF’s Executive Board, both parties have expressed interest in deliberating a longer-term bailout strategy. The ongoing negotiations underscore Pakistan’s commitment to implementing vital policy reforms aimed at curbing deficits, bolstering reserves, and managing burgeoning debt servicing obligations.
Anticipation surrounds an upcoming Executive Board meeting of the IMF in late April, during which the matter will be evaluated, although an exact date remains unconfirmed, as per an IMF spokesperson.
