IMF team set to visit Pakistan to discuss new programme before budget finalisation

An International Monetary Fund (IMF) mission is set to visit Pakistan in May to discuss a potential new financial programme, the IMF announced on Sunday.

This visit comes as the Pakistani government begins crafting its annual budget for the next financial year with the aim of stabilising the economy and implementing necessary reforms.

The announcement follows the completion of a short-term $3 billion programme last month, which helped Pakistan avoid a sovereign default.

Prime Minister Shehbaz Sharif’s government is now seeking a more comprehensive and longer-term agreement with the IMF to ensure sustained economic recovery and growth.

“A mission is expected to visit Pakistan in May to discuss the FY25 budget, policies, and reforms under a potential new programme for the welfare of all Pakistanis,” the IMF stated in an email response to Reuters.

However, the exact dates of the visit and the specifics of the programme were not disclosed.

Pakistan’s fiscal year runs from July to June, and the budget for fiscal year 2025 must be presented before June 30.

The IMF emphasised the importance of accelerating reforms, stating that the size and duration of the new programme would be determined by the reform package and the country’s balance of payments needs.

Pakistan’s economy, which is valued at around $350 billion, has shown signs of stabilisation following the last IMF programme, with inflation decreasing from a record high of 38 per cent in May 2023 to about 17 per cent in April 2024.

However, the country still faces significant fiscal challenges and a high deficit, and growth has stagnated due to strict import controls.

The current growth rate is expected to be around 2 per cent this year, a slight improvement from the negative growth rate experienced last year.

In a recent interview with Reuters, Finance Minister Muhammad Aurangzeb expressed optimism about reaching an agreement on a new IMF programme in May. Pakistan is expected to seek at least $6 billion in additional financing from the IMF, including funding under the Resilience and Sustainability Trust.

The forthcoming IMF visit is crucial for Pakistan as it prepares its budget and seeks to implement reforms to strengthen the economy.

The discussions are likely to focus on fiscal discipline, economic growth, and the welfare of all Pakistanis, with an emphasis on achieving long-term stability and sustainability.