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US Ambassador supports Pakistan’s economic reform agenda

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Islamabad, 28 May 2024(TDI): United States Ambassador Donald Blome on Monday highlighted Washington’s ongoing support for Pakistan’s economic reforms agenda in a meeting with Finance Minister Muhammad Aurangzeb.

The US embassy said in a statement, that Islamabad seeks a larger loan program from the International Monetary Fund (IMF) to stabilize its fragile economy.

Reeling from low foreign exchange reserves, massive currency devaluation, and high inflation over the past two years, Pakistan faces a chronic balance of payment crisis.

The South Asian country last month completed a short-term $3 billion IMF loan program that helped it avert a sovereign default.

However, Prime Minister Shehbaz Sharif continues to stress the need for a longer-term program from the international lender to stabilize Pakistan.

The IMF has pressed upon Islamabad to undertake vital economic reforms which include overhauling loss-making state-owned enterprises and introducing tax, energy, and power reforms in exchange for a fresh loan program.

Pakistan views the US as a key ally that can help alleviate its economic crisis, considering its huge influence within the IMF.

“US Ambassador Donald Blome met today with Finance Minister Muhammad Aurangzeb to discuss key aspects of the US-Pakistan trade, investment, and economic relationship,” US Mission Spokesperson Thomas Montgomery said on Monday.

“The Ambassador highlighted ongoing US support for Pakistan’s economic reform agenda.”

The US embassy said Washington was committed to working with Pakistan in technical and development-related initiatives.

It added that Blome emphasized in the meeting how the US remained Pakistan’s largest export market, making it a major source of high-quality investment and a “strong partner” for Pakistan’s economic future.

Pakistan’s economy has recorded some gains since last year when it narrowly avoided a sovereign default, with inflation coming down to around 17 percent in April 2024 from a record high of 38 percent in May 2023.

However, the South Asian country is still dealing with a high fiscal shortfall and while it has controlled its external account deficit through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2 percent this year, compared to negative growth last year.

Also read: 7th Round of Pakistan-Lithuania Bilateral Political Councils

Ties between Islamabad and Washington, once close allies, have recently started to improve after years of frosty relations, mostly due to America’s concerns about Pakistan’s alleged support of the Taliban in Afghanistan.

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