ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb expressed optimism on Sunday Pakistan would secure a “larger and longer” bailout agreement in its negotiations with the International Monetary Fund (IMF) in July, following the approval of the $67.76 billion federal budget.
Pakistan began discussions about a new loan with IMF officials soon after completing a $3 billion program that helped the country stave off a sovereign debt default last year.
The international lending agency sent its delegation to Pakistan in May to hold negotiations with the new government.
Prime Minister Shehbaz Sharif also confirmed during a speech at the National Assembly on Tuesday that his administration had prepared the budget in consultation with the IMF, after repeatedly emphasizing the importance of securing another bailout facility to keep macroeconomic reforms on track.
“I have already said we are moving in a positive way,” the finance minister said while discussing the fresh IMF program during a media interaction in the federal capital. “During July we should get into a good agreement.”
“I am very optimistic that we will be able to take it through the finish line for an extended fund program, larger and longer in nature,” he added.
Pakistan has sought IMF loans in recent years due to a combination of economic challenges, including significant fiscal and current account deficits, declining foreign exchange reserves and rising public debt.
These economic vulnerabilities have been exacerbated by external shocks like fluctuating commodity prices and internal challenges such as political instability and policy inconsistency.
The government has maintained the country’s economy is on the mend but considers the new bailout important to ensure a substantial financial cushion.
The finance minister reiterated that he viewed the program being funded and supported by the IMF as part of Pakistan’s own endeavor to strengthen itself economically.
“We need the IMF because not only these IFIs [international financial institutions] but even our firendly nations want a backstop which is the fund program,” he continued. “What we have to do in the next three years to make sure this is the last program.”
He mentioned he had already been in virtual discussions with the IMF to move toward a staff-level agreement.
Aurangzeb said the basic framework, including the prior actions, had been formulated while the IMF delegation was in Pakistan, saying that the structural benchmarks of the program had been the same for the last three or four years while Pakistan had not implemented.
“Now we have told them to trust us and we will get this done,” he added.
Pakistan finance minister says ‘optimistic’ for ‘larger and longer’ IMF bailout program in July
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Pakistan finance minister says ‘optimistic’ for ‘larger and longer’ IMF bailout program in July
- Muhammad Aurangzeb says virtual negotiations with the international lending agency are moving in a positive direction
- He also maintains Pakistan needs to work for the next three years to ensure that it never has to seek another IMF program
ADB, Pakistan sign over $300 million agreements to undertake climate resilience initiatives
- Pakistan ranks among nations most vulnerable to climate change and has seen erratic changes in weather patterns
- The projects in Sindh and Punjab will restore nature-based coastal defenses and enhance agricultural productivity
ISLAMABAD: The Pakistani government and the Asian Development Bank (ADB) have signed more than $300 million agreements to undertake two major climate resilience initiatives, Pakistan’s Press Information Department (PID) said on Tuesday.
The projects include the Sindh Coastal Resilience Sector Project (SCRP), valued at Rs50.5 billion ($180.5 million), and the Punjab Climate-Resilient and Low-Carbon Agriculture Mechanization Project (PCRLCAMP), totaling Rs34.7 billion ($124 million).
Pakistan ranks among nations most vulnerable to climate change and has seen erratic changes in its weather patterns. In 2022, monsoon floods killed over 1,700 people, displaced another 33 million and caused over $30 billion losses, while another 1,037 people were killed in floods this year.
The South Asian country is ramping up climate resilience efforts, with support from the ADB and World Bank, and investing in climate-resilient infrastructure, particularly in vulnerable areas.
“Both sides expressed their commitment to effectively utilize the financing for successful and timely completion of the two initiatives,” the PID said in a statement.
The Sindh Coastal Resilience Project (SCRP) will promote integrated water resources and flood risk management, restore nature-based coastal defenses, and strengthen institutional and community capacity for strategic action planning, directly benefiting over 3.8 million people in Thatta, Sujawal, and Badin districts, according to ADB.
The Punjab project will enhance agricultural productivity and climate resilience across 30 districts, improving small farmers’ access to climate-smart machinery, introducing circular agriculture practices to reduce residue burning, establishing testing and training facilities, and empowering 15,000 women through skills development and livelihood diversification.
Earlier this month, the ADB also approved $381 million in financing for Pakistan’s Punjab province to modernize agriculture and strengthen education and health services, including concessional loans and grants for farm mechanization, Science, Technology, Engineering and Mathematics (STEM) education, and nursing sector reforms.
