Pakistan, IMF set to hold talks over 'long-term loan' this week

The International Monetary Fund (IMF) said it’s too early to determine the new loan with Pakistan amidst ongoing discussions with the country.

However, IMF Communication Director Julie Kozack informed that a team led by Nathan Porter will meet Pakistani authorities this week to discuss a new bailout programme under the Extended Fund Facility (EFF).

“Right now, a mission team led by Nathan Porter, our mission chief, is meeting with the authorities this week to discuss the next phase of our engagement with Pakistan,” she said while addressing a press briefing.

During the presser, she was asked if the talks with Pakistan could lead to staff-level agreement or whether it is only a preliminary visit. 

Ms Kozach said: “There is a mission on the ground, we will wait for them to complete their work, and we will communicate the findings of the mission in due course.”

The IMF official also informed the journalist about development in Islamabad and the IMF’s ongoing talk.

Meanwhile, the IMF executive board after completing a second review of the stand-by arrangement on April 29 has released a tranche of $1 billion.

Julie Kozach said that the completion by our Board of the second and final review of SBA reflected the authorities’ strong policy effects during the time of the standby, which helped authorities to stabilise the economy.

The Washington-based lender, in its report issued earlier this month, has expressed doubts over Pakistan's ability to successfully return the loan.

The report stated: “The country’s capacity to repay the fund is subjected to significant risks and remains critically dependent on the policy implementation and timely external financing.”

It added that Pakistan’s need for gross financing is worth $123 billion during the next five years, the country expects to seek $21 billion in fiscal year 2024-25l and $23 billion in 2025-26.

Last month, Finance Minister Muhammad Aurangzeb expressed hope for a larger bailout programme from the IMF.

However, Pakistan has been requesting a ‘larger and longer’ loan from the IMF and discussions are underway with funds.