The board of directors of the International Monetary Fund (IMF) is expected to meet on April 29 to deliberate on approving a $1.1 billion disbursement to Pakistan, according to a statement released by the fund on Wednesday.
This allocation represents the final tranche of a $3 billion Stand-By Arrangement (SBA) obtained by Pakistan last summer, intended to prevent a sovereign default and concluded at the end of the month.
The South Asian country is seeking a new, more substantial long-term loan from the IMF. Pakistani Finance Minister Muhammad Aurangzeb has indicated that a personnel agreement could be reached by early July for the new program.
Although Pakistan has not yet formally requested this loan, negotiations are already underway between the Fund and the government. The country is seeking a loan over a three-year period to achieve economic stability and implement significant structural changes.
The nation’s $350 billion economy faces ongoing balance of payments challenges, including nearly $24 billion in debt and interest repayment obligations due in the next fiscal year , or triple the amount of foreign exchange reserves of its central bank.
Pakistan’s Finance Ministry forecasts economic growth of 2.6% for the fiscal year ending June, while average inflation is expected to reach 24%, down from 29.2% in fiscal 2023 /2024.
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