ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Tuesday that Pakistan would like to sign up to a major International Monetary Fund (IMF) program and stressed the need to address the problems of low economic growth and high inflation through stabilization policies.
The minister also said that the era of cash deposits by friendly countries and foreign debt rollover was over and the country had to break out of the mindset of mosaicking deep-rooted economic problems.
In his first interaction with a group of journalists since being sworn in as minister, Aurangzeb indicated that the coalition government would not abandon the path to economic stabilization and was ready to enforce the IMF mandate once again.
“Macroeconomic stability needs permanence and therefore Pakistan needs a large-scale and longer-term IMF programme,” Aurangzeb said. However, he did not explain the duration of the program and the actual amount of loan that Pakistan will seek to support its balance of payments.
Aurangzeb’s statement came a day before an IMF team is due to arrive in Pakistan to negotiate the final tranche of a $1.1 billion loan. The IMF team will arrive for only five days and negotiations are expected to end on March 18.
“We would very much like to start discussions on the Extended Fund Facility [EFF] during the upcoming visit, but detailed negotiations will take place during the spring meetings,” said the minister, who will travel to Washington next month to attend the annual IMF and World Bank meetings.
The finance minister said there was a real sense of urgency and “we are in a good position to complete this programme” and negotiate a new deal. He added that the government will also get help from the IMF in the budget.
“I am quite confident that we are well on our way to a successful conclusion and finalization of the IMF second review provisions,” Aurangzeb said. He added that Pakistan would share the plan for the new program with the IMF, but added that the discussions would take place in Washington.
The short duration of the IMF’s vision and the minister’s announcement of the completion of the new program in Washington suggest that the upcoming IMF visit could only end with the announcement of a staff-level agreement to complete a second review of the current program.
