Pakistan eyeing possible $3bn SBA loan follow-up programme: IMF chief

• Pakistan in talks with IMF on monitoring program: Georgieva.
• He says Pakistan is “successfully completing the existing programme”.
• The head of the IMF highlights issues that need to be addressed.
  

WASHINGTON: Pakistan is in discussions with the International Monetary Fund on a possible follow-up program to the nine-month Stand-by Arrangement (SBA) worth $3 billion, IMF chief Kristalina Georgieva said on Thursday, adding that it has important issues to resolve. .

Georgieva told an event at the Atlantic Council think tank that Pakistan is successfully completing its existing program with the IMF and its economy is performing somewhat better, with reserves now building.

“There is a commitment to continue on this path, and the country is turning to the fund to potentially have a follow-up program,” Georgieva said, pointing to issues the embattled South Asian nation had yet to address.

“There are very important issues that need to be resolved in Pakistan: the tax base, how the wealthiest part of society contributes to the economy, how public spending is directed and of course creating… a more transparent environment ».

Pakistan and the IMF last month reached a staff-level agreement on the second and final revision of the $3 billion stand-by arrangement, which, if approved by the world lender’s board, would release about $1.1 billion to the struggling South Asian nation.

The IMF’s board is expected to review the issue at the end of April, but no specific date has been set, a spokesman said.

Both sides also talked about negotiating a long-term bailout program and pursuing necessary policy reforms to curb deficits, build reserves and manage ballooning debt service.

The news reported on Tuesday that Pakistan has decided to formally approach the IMF for the Medium-Term Enhanced Fund Facility (EFF) during the upcoming spring meetings of the Breton Wood Institutions (BWIs).

The size and duration of the upcoming bailout will be determined by the IMF review mission which is expected to hold talks, possibly from the first week of May 2024 to finalize the broad contours of the upcoming bailout.

“We are ready to make a formal request to the IMF during the upcoming spring meetings of the BWIs, known as the IMF and the World Bank from April 15 to 20, 2024 in Washington, as Pakistan’s delegation led by the finance minister will attend” . confirmed top official sources speaking to me The news on Tuesday.

The sources said that Pakistan decided to request an increase in ETA through climate finance, so there was a possibility of securing a size of 6 to 8 billion dollars for the upcoming program.

“We will present our case to the IMF management that Pakistan has faced serious consequences of climate degradation and deserves the support of the international community and donor agencies,” the sources said. Islamabad will submit a request for the EFF with the potential to increase through climate finance.