Pakistan will be optimistic about its IMF talks

Significance

Islamabad now seeks a larger, longer-term bailout programme with the Fund. Finance Minister Muhammad Aurangzeb has suggested that a staff-level agreement on such a package could be secured by June or early July, after which the IMF Executive Board would have to approve the deal for disbursements to commence.

Impacts

• The government will aim to privatise several loss-making state-owned enterprises in the months ahead.
• Pakistan may look for part of the new package to be under the IMF’s Resilience and Sustainability Facility.
• Islamabad will continue to rely heavily on financial assistance from friendly countries such as China and Saudi Arabia.