Pakistan Seeks Major IMF Support Amid Economic Slowdown and High Inflation

"Pakistan Seeks Major IMF Support Amid Economic Slowdown and High Inflation"

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March 14, 2024

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Pakistan’s new Finance Minister, Muhammad Aurangzeb, shared his plans for dealing with the International Monetary Fund (IMF) as talks are set to begin soon.

Aurangzeb mentioned that Pakistan aims to secure a bigger and longer IMF deal to address the challenges of low economic growth and high inflation. He emphasized the need to move beyond short-term fixes and focus on lasting solutions to improve the economy.

The finance minister highlighted the importance of achieving macroeconomic stability and expressed Pakistan’s willingness to follow the IMF’s advice.

Aurangzeb discussed the upcoming visit of an IMF team to Pakistan for policy discussions regarding the final part of a $1.1 billion loan. He emphasized the need to fully implement structural changes to avoid relying on temporary measures repeatedly.

Regarding interest rates, Aurangzeb suggested a possible decrease as inflation rates have slowed down. However, he clarified that decisions regarding interest rates are made by the State Bank of Pakistan’s Monetary Policy Committee.

Aurangzeb also emphasized the significance of the Special Investment Facilitation Council (SIFC) in attracting foreign investment. He expressed optimism about accessing foreign commercial loans after finalizing the new IMF program but remained cautious about borrowing from international capital markets.