Pakistan to request for 3-year IMF programme: Aurangzeb

Pakistan has initiated discussions with the International Monetary Fund (IMF) over a new multi-billion dollar loan agreement to support its economic reform programme, Finance Minister Muhammad Aurangzeb has said, adding that the country will at least be requesting for a three-year programme.

During his visit to Washington, Finance Minister Muhammad Aurangzeb will attend the spring meetings organized by the IMF and World Bank, which kick off in earnest on Tuesday, with two clear objectives: to help countries combat climate change, and to assist the world’s most indebted nations.

The meetings — which bring central bankers together with finance and development ministers, academics, and representatives from the private sector and civil society to discuss the state of the global economy — will kick off with the IMF’s publication of its updated World Economic Outlook.

Elections were held in February this year which were marred by allegations of rigging, with PTI founder Imran Khan jailed and barred from running, and his party subject to a crackdown.

The shaky coalition that emerged, led by Prime Minister Shehbaz Sharif, is now tasked with engineering an economic turnaround by implementing a raft of unpopular belt-tightening measures.

“I do think that we will at least be requesting for a three year programme,” Aurangzeb told AFP on Monday. “Because that’s what we need, as I see it, to help execute the structural reform agenda.”

“By the time we get to the second or third week of May, I do think we’ll start getting into the contours of that discussion,” he added. The country is nearing the end of a nine-month, $3 billion loan programme with the International Monetary Fund designed to tackle a balance-of-payments crisis which brought it to the brink of default last summer.

With the final $1.1bn tranche of that deal likely to be approved later this month, Pakistan has begun negotiations for a new multi-year IMF loan programme worth “billions” of dollars, Aurangzeb said during an interview in Washington.

“The market confidence, the market sentiment is in much, much better shape this fiscal year,” said Aurangzeb, a former banker who took up his post last month.

“It’s really for that purpose that, during the course of this week, we have initiated the discussion with the Fund to get into a larger and an extended programme,” he added.

An IMF spokesperson told AFP that the Fund is “currently focused on the completion of the current Standby Agreement programme,” referring to the ongoing nine-month programme scheduled for completion shortly.