Pakistan Seeks IMF Approval for $7 Billion Loan Amid Economic Challenges
ISLAMABAD: Pakistan is actively pursuing approval from the International Monetary Fund (IMF) for a new $7 billion loan program, with Finance Minister Muhammad Aurangzeb expressing optimism about the progress made. On Wednesday, Aurangzeb confirmed that discussions with the IMF are advancing well, and the country aims for board approval in September.
The proposed 37-month loan program, initiated in July, is part of Pakistan’s broader strategy to stabilize its economy amidst escalating financial pressures. However, the new Extended Fund Facility requires formal approval from the IMF’s Executive Board before it can be finalized.
Historically, Pakistan has relied on external financing from key allies such as Saudi Arabia, the United Arab Emirates, and China to manage its financial needs. These partnerships have been crucial in addressing external financing gaps, but securing new support remains complex.
Aurangzeb remains hopeful despite the current external financing gap, estimated between $3 to $5 billion. The approval process is further complicated by the need to secure these additional funds. Recently, the finance minister visited China to negotiate potential reprofiling of energy sector debts as part of the broader effort to secure necessary funding.
