The International Monetary Fund (IMF) has released its Executive Board meeting schedule up to September 4, 2024, with Pakistan, despite its severe financial struggles, notably absent from the agenda. This omission has raised concerns, as Pakistan is in dire need of financial support to stabilize its economy. However, sources indicate that the Pakistani government remains hopeful about securing a $7 billion bailout package from the IMF next month.
Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, dismissed concerns that the IMF might decline the staff-level agreement reached in July. He expressed confidence that the IMF will approve the loan program in September. The 37-month loan program was agreed upon in July, subject to the IMF Executive Board’s approval and Pakistan’s ability to secure necessary financing assurances from its development and bilateral partners.
The Ministry of Finance remains optimistic about the final approval of the loan. Sources reveal that the government is working diligently to roll over $12 billion in loans from China, Saudi Arabia, and the United Arab Emirates (UAE). In addition to these efforts, Pakistan has requested an extra $1.2 billion loan from Saudi Arabia to cover a $2 billion financing gap.
Pakistan already owes substantial amounts to its allies: $5 billion to Saudi Arabia in cash deposits, $4 billion to China, and $3 billion to the UAE. These figures are separate from an additional $4.5 billion in commercial loans, including those from China. These loans are critical for Pakistan’s economic stability, especially as it faces an external financing requirement of $26.2 billion by June 2025.
The government has been actively engaging with Saudi Arabia, the UAE, and China to meet these gross financing needs under the IMF program. In July, Finance Minister Aurangzeb traveled to China to negotiate energy sector debt reprofiling. This is part of broader efforts to ensure Pakistan’s financial sustainability, with rollovers and disbursements from these long-standing allies playing a key role in meeting external financing needs in the past.
The release of the IMF’s schedule, excluding Pakistan’s loan approval, is concerning as the country’s economy desperately needs this financial lifeline. Despite the absence of Pakistan on the agenda, the government remains hopeful that the IMF board will approve the loan in September. Aurangzeb, in a recent interview, reiterated that although there is speculation about the staff-level agreement not being approved, the government is confident that the IMF will come through for Pakistan.
This situation highlights the critical nature of Pakistan’s economic position and the urgent need for international financial support to prevent further economic deterioration. The coming weeks will be crucial in determining whether Pakistan can secure the necessary support to stabilize its economy and meet its external obligations.
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