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- The IMF this week said the two sides have made ‘significant progress’ on reviews of Pakistan $8.4 billion loan programs
- The government is finalizing flood damage assessments and will prioritize the use of domestic resources, Aurangzeb says
ISLAMABAD: Pakistan is aiming to secure an early staff-level agreement with the International Monetary Fund (IMF) as Finance Minister Muhammad Aurangzeb is set to depart for Washington this week, seeking approval for reviews of the country’s $8.4 billion loans.
Pakistan secured a $7 billion, 37-month Extended Fund Facility in Sept. last year, followed by a $1.4 billion, 28-month Resilience and Sustainability Facility in May, to bankroll its economy.
The IMF this week said the two sides have made “significant progress” toward a staff-level agreement on reviews of the South Asian country’s $8.4 loans, the lender said late Wednesday.
Pakistan’s program implementation remained strong and broadly aligned with commitments, while progress was made in discussions on fiscal consolidation to strengthen public finances, according to the lender.
“The minister reaffirmed that talks with the IMF mission remain constructive, with only a few outstanding issues, and expressed optimism about reaching a staff-level agreement shortly during his upcoming meetings in Washington,” the Pakistani finance ministry said, following Aurangzeb’s virtual meeting with a Saudi business delegation.
On the domestic front, the minister said, the government is finalizing rapid damage assessments following recent floods and will prioritize the use of domestic resources for rescue and relief operations, before considering external assistance for rehabilitation and reconstruction.
Pakistan’s recent floods, triggered by heavy monsoon rains and India’s release of excess water, have killed more than 1,037 people and affected another over 4 million, besides damaging standing crops, homes and road network. The government has initially estimated the losses at Rs370 billion ($1.31 billion), though a detailed assessment has yet to be made.
This week, the World Bank projected Pakistan’s economy to grow by 2.6 percent in the ongoing fiscal year that began in July, lowering its earlier estimate due to the recent monsoon floods.
On Thursday, the IMF said its officials would continue policy discussions with Pakistani authorities with a view to settling any outstanding issues.
“The IMF team wants to express its sympathy to those affected by the recent floods, and is grateful to the Pakistani authorities, private sector, and development partners for many fruitful discussions,” the lender said as its mission completed its two-week visit to Pakistan.