Pakistan is gearing up to negotiate a new loan package with the International Monetary Fund (IMF) as it seeks to address its mounting debt obligations, according to Bloomberg News. Citing a Pakistani official, the report indicates that the country aims to secure a loan of at least $6 billion to assist the incoming government in repaying billions of dollars in debt due this year.
The proposed loan arrangement is expected to take the form of an Extended Fund Facility (EFF) with the IMF. Talks between Pakistan and the global lender are slated to commence in March or April, with the aim of establishing a long-term agreement to stabilize the country’s $350-billion economy.
Pakistan narrowly avoided default last summer with the assistance of a short-term IMF bailout. However, the existing program is set to expire next month, necessitating urgent negotiations for a sustainable, long-term solution.
In anticipation of the impending bailout negotiations, Pakistan had to implement a series of stringent measures as stipulated by the IMF. These measures included revising its budget, raising its benchmark interest rate, and implementing hikes in electricity and natural gas prices.
Despite the reported plans for a new IMF loan, the IMF has yet to issue an official response to Reuters’ request for comment on the Bloomberg report. Similarly, Pakistan’s finance ministry has not provided immediate commentary on the matter.
The looming negotiations with the IMF underscore the significant economic challenges facing Pakistan and the imperative for proactive measures to address its debt burden. As the country grapples with fiscal pressures, securing a new IMF loan could offer vital support in navigating its economic uncertainties and ensuring financial stability in the foreseeable future.
Sources By Agencies
