Pakistan’s Finance Minister Muhammad Aurangzeb announced plans for an IMF delegation to visit in mid-May to discuss a new long-term financial arrangement, with hopes to finalize a IMF Staff Level Agreement by mid-July.
During a media briefing at the conclusion of his week-long US tour, Aurangzeb highlighted the IMF’s readiness to accelerate the negotiation process. “We’ll delve into the details of the new program starting mid-May,” he stated.
At the Pakistan Embassy, the minister expressed optimism about the IMF’s board of governors reviewing the final portion of the current agreement by this month’s end, anticipating the subsequent release of funds.
Pakistan is negotiating a new loan package estimated between $6-8 billion and is favoring a three-year duration for this financial support.
Addressing Debt Repayment through CPEC-II
Aurangzeb refrained from speculating about the size or term of the upcoming program at a recent briefing. He previously communicated to a Chinese audience that Pakistan’s ability to repay its debts to China hinges on completing the second phase of the China-Pakistan Economic Corridor (CPEC).
He outlined that CPEC’s initial phase established significant infrastructure, and the upcoming phase would involve launching special economic zones essential for monetizing these assets and attracting more Chinese investments.
“CPEC was a cornerstone project, and the second phase is crucial for initiating the repayment of debts,” Aurangzeb explained, acknowledging China’s support and stressing the importance of moving forward with Phase II.
Continued Partnerships and Economic Reforms
In discussions with Chinese Finance Minister Lan Fo’an in Washington, Aurangzeb praised China’s role in Pakistan’s growth through initiatives like CPEC, focusing on infrastructure and economic zones.
He also highlighted ongoing reforms in taxation, energy, and privatization, discussed during meetings with global financial entities like S&P Global and Fitch Ratings. These reforms aim to stabilize Pakistan’s economy across various time frames.
Furthermore, Aurangzeb discussed the alignment of the World Bank’s efforts with Pakistan’s priorities, including tackling climate change and advancing digital transformation. He also noted potential investments from Saudi Arabia and addressed economic concerns related to external factors, inflation, and interest rates with rating agencies.
As Pakistan continues to navigate its financial challenges, the government’s engagement with international partners and commitment to strategic economic projects like CPEC underscore its efforts to ensure long-term economic stability and growth.
