Finance Minister Muhammad Aurangzeb has announced Pakistan’s formal request for approximately $1 billion from the International Monetary Fund (IMF) to address pressing external economic challenges. In an interview with Reuters during the IMF/World Bank autumn meetings in Washington, he confirmed the funding request under the IMF’s Resilience and Sustainability Trust (RST).
Following a recent bailout arrangement with the IMF, the country is also in discussions with the Asian Infrastructure Investment Bank regarding credit support for a planned Panda bond issuance, estimated at $200-250 million.
Moreover, the government is working to accelerate the privatization of Pakistan International Airlines (PIA) and the outsourcing of Islamabad’s international airport by November. Aurangzeb clarified that the delay in these privatization efforts is attributed to the need for macroeconomic stability and meticulous due diligence on potential investors.
Pakistan encountered a severe economic crisis last year, nearly defaulting amid political turmoil, catastrophic flooding, and a global economic slowdown. While inflation peaked at 38%, it has since dropped to under 7% due to stringent monetary policies. Recently, the IMF approved a $7 billion loan for Pakistan, representing the country’s 24th loan agreement since 1958.
Aurangzeb pointed out that improvements have been made in the current account deficit and the stabilization of the Pakistani rupee, which has depreciated about 65% against the US dollar since 2020. He emphasized the government’s progress in tax collection and the need for further increases, stressing the importance of expanding the tax base and implementing effective reforms in both the power sector and state-owned enterprises.
