An International Monetary Fund (IMF) delegation is set to arrive in Pakistan on November 2 to conduct the initial assessment of the country’s $3 billion standby arrangement (SBA). IMF Mission Chief to Pakistan, Nathan Porter, will lead the delegation. The visit follows Pakistan’s approval of the loan program earlier this year, which helped avert a sovereign debt default. The country received its first $1.2 billion tranche from the IMF.
The finance ministry is gearing up for these crucial discussions with the IMF. Finance Secretary has called a meeting to review the progress on all structural benchmarks, indicative criteria, and performance criteria set in agreement with the IMF for September 2023.
One of the major challenges for Pakistan’s economic recovery is managing the budget deficit within the agreed limits. The finance ministry has been actively working to keep spending in check and warned provinces to reduce expenses.
Punjab and Sindh have reportedly made significant progress in this regard. However, the increasing debt servicing requirements pose another challenge. These requirements are expected to rise to Rs8.5 trillion for the current fiscal year 2023-24, exceeding the initial target of Rs7.3 trillion due to the central bank’s higher policy rate.
The upcoming talks with the IMF will be crucial for Pakistan’s economic outlook as the nation navigates its way to stability and growth.
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