Washington (Web Desk/Agencies): Federal Minister for Finance and Revenue, Muhammad Aurangzeb said that Pakistan has initiated discussions with the International Monetary Fund (IMF) over a new multi-billion dollar loan agreement to support its economic reform program.
With the final $1.1 billion tranche of Standby Arrangement (SBA) likely to be approved later this month, Pakistan has begun negotiations for a new multi-year IMF loan program worth “billions” of dollars, the minister said in an interview with Agence France Presse (AFP).
“The market confidence, the market sentiment is in much, much better shape this fiscal year,” he said adding “it’s really for that purpose that, during the course of this week, we have initiated the discussion with the Fund to get into a larger and an extended program,” he added.
During his visit to Washington, Aurangzeb will also attend the spring meetings organized by the IMF and World Bank, which kick off in earnest Tuesday, with two clear objectives: to help countries combat climate change, and to assist the world’s most indebted nations.
The meetings — which bring central bankers together with finance and development ministers, academics, and representatives from the private sector and civil society to discuss the state of the global economy — will kick off with the IMF’s publication of its updated World Economic Outlook.
“I do think that we will at least be requesting for a three year program,” Aurangzeb said. “Because that’s what we need, as I see it, to help execute the structural reform agenda.”
“By the time we get to the second or third week of May, I do think we’ll start getting into the contours of that discussion,” he added.
On trading relationship with United States and China, the minister elaborated that US was Pakistan’s largest trading partner, and it has always supported it and helped in terms of the investments. “So that is always going to be a very, very critical relationship for Pakistan.”
On the other side, he added, a lot of investment, especially in infrastructure, came through China Pakistan Economic Corridor (CPEC),” he said, referring to the roughly 1,860-mile long corridor.
As per the report, as part of the structural reform program agreed to by the previous government, Pakistan is in the middle of a privatization drive to sell off its poorly-performing state-owned enterprises (SOEs). The first SOE on the list is Pakistan International Airlines (PIA).
“We will get to know in the next month or so with respect to interest from prospective bidders,” Aurangzeb said adding the government wanted to go through with that privatization and take it through the finishing line by the end of June.
If the PIA privatization goes well for the government, other companies could soon follow. “We’re creating an entire pipeline,” he said, adding: “Over the next couple of years we want to really accelerate that.”
Separately, Finance Minister Muhammad Aurangzeb has invited international stakeholders to become close partners in Pakistan's journey towards economic development.
He was speaking at a seminar in Washington on 'Opportunities and Challenges for the Pakistani Economy through 2024 and Beyond', the Radio Pakistan reported.
The finance minister highlighted the measures taken by the government to put economy on a higher growth trajectory by facilitating exports, increasing remittances, expanding tax-base, improving ease of doing business, digitalizing economy and attracting foreign investment.
“Pakistan is prioritizing investment in key areas of agriculture, IT, mining and energy to enhance productivity and ensure sustainable growth,” he said.
He said positive trends in the industrial activity, better agriculture outlook, and improvements in the Composite Leading Indicators of Pakistan's major export markets are signs of economic recovery.