ISLAMABAD: 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, as 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 since 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 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, 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.
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. Pakistan denies it supported the armed group in taking over the country.
Relations strained further under the government of former prime minister Imran Khan, who ruled from 2018-22 and antagonized Washington throughout his tenure, welcoming the Taliban takeover of Afghanistan in 2021. Khan later accused Washington of being behind attempts to oust him, allegations which Washington has repeatedly denied.
The previous government of PM Sharif that took over after Khan in 2022 and whose term ended last year, had tried to mend ties but analysts widely believe the United States will not seek a significant broadening of ties with Islamabad in the near future but remain mostly focused on security cooperation, especially on counterterrorism and Afghanistan.
