Pakistan is preparing to approach the International Monetary Fund (IMF) for a new loan of at least $6 billion, as reported by Bloomberg News citing an official source from Pakistan.
The loan is intended to help the incoming government meet upcoming debt obligations. Pakistan aims to negotiate an Extended Fund Facility with the IMF, with talks expected to begin in March or April.
Bloomberg: Pakistan Targets Minimum $6 Billion in New IMF Loan Program
Last summer, Pakistan narrowly avoided default with a short-term bailout from the IMF. However, with the bailout program set to expire soon, the new administration must secure a long-term agreement to stabilize the economy, which is valued at $350 billion.
Before receiving the previous bailout, Pakistan had to adhere to IMF-mandated measures such as budget revisions, interest rate increases, and adjustments to utility tariffs.
Why Pakistan Must Prioritize Dialogue with IMF Beyond Election Outcomes, Says Bloomberg
The IMF spokesperson reaffirmed ongoing dialogue with Pakistani authorities regarding essential reforms and readiness to provide support to the post-election government through a new arrangement if requested.
The caretaker finance minister of Pakistan did not immediately respond to Reuters’ inquiry about the Bloomberg report.
Fitch, a prominent ratings agency, highlighted Pakistan’s precarious external position and emphasized the importance of securing financing from both multilateral and bilateral partners for the incoming government.
Fitch assumed that a new deal would be reached within a few months, but warned that prolonged negotiations or failure to secure the deal could escalate external liquidity pressures and increase the risk of default.
IMF Will Now Give Loan To Pakistan