HomeNewsDiplomatic NewsPakistan eyes comprehensive IMF Program for economic overhaul

Pakistan eyes comprehensive IMF Program for economic overhaul

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Islamabad, 13 March 2024 (TDI): In his inaugural press conference, newly appointed Finance Minister Muhammad Aurangzeb unveiled Pakistan’s strategy for economic stability, highlighting the country’s intent to embark on an extended IMF program to access the Extended Fund Facility.

“The Special Investment Facilitation platform is crucial for attracting equity and international investment,” Aurangzeb stated, underscoring the need for long term development with feasible and bankable projects over reliance on deposits and rollovers from friendly and bilateral partners.

Aurangzeb hinted at the upcoming IMF review mission, stating, “We have requested the IMF to conduct the second review under the SBA program and release the final installment.” He also expressed intent to initiate discussions for a new EFF program.

Addressing public concerns over rising prices, Aurangzeb assured that achieving macroeconomic stability would gradually alleviate this issue.

Moreover, he cited the decline in CPI-based inflation as a positive development and hinted at a potential decrease in the policy rate, while respecting the independence of the State Bank of Pakistan’s Monetary Policy Committee.

The minister stressed the urgency of entering an “execution mode” to address structural bottlenecks, with priorities including plugging leaks, digitizing the Federal Board of Revenue (FBR), and addressing the financial challenges faced by State Owned Enterprises (SOEs).

He emphasized the need for the tax-to-GDP ratio to reach double digits and for broadening the tax base to include wholesalers, retailers, real estate, and agricultural income.

Aurangzeb advocated for the private sector to take a leading role in the economy and highlighted the importance of public-private partnerships in the Public Sector Development Program.

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He cited Sindh’s successful implementation of this model in Thar as an example for the federal government to follow.

The IMF review mission is scheduled to visit Islamabad from March 14 to 18, 2024, to complete the second review and release the final installment of $1.1 billion under the Standby Arrangement (SBA) program.

Aurangzeb confirmed that Islamabad will request the IMF to initiate discussions on a new bailout package under the EFF during the upcoming spring meetings of the IMF/World Bank.

 

 

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