The International Monetary Fund (IMF) is expected to approve a new loan program for Pakistan during its Executive Board meeting on September 25, news reported on Thursday. Julie Kozek, IMF’s Director of Communication, confirmed the meeting in a press briefing, stating that negotiations for the $7 billion loan program were finalized in July.
Pakistan’s Finance Minister Confirms Agreement
Finance Minister Muhammad Aurangzeb announced that all issues with the IMF have been resolved, saying, “Alhamdulillah, the Prime Minister is grateful to the IMF negotiation team and related institutions.” He added that Pakistan’s economy is transitioning from stabilization to growth. Aurangzeb noted that a reduction in the policy rate will encourage investment and business, creating more jobs. The agreement is set to be finalized at the IMF board meeting later this month.
Inflation Eases, Providing Relief
The finance minister also emphasized that the continued decrease in inflation is bringing relief to the public, signaling positive changes for the economy.
Economists Warn of IMF Program Risks
While the loan program is seen as a crucial step for Pakistan, economists have raised concerns about the country’s ability to meet IMF conditions. Senior journalist Mehtab Haider warned that Pakistan may struggle to secure a $12 billion loan rollover from China, Saudi Arabia, and the UAE. Failure to obtain these loans could jeopardize Pakistan’s ability to meet its IMF payment obligations.
Haider further cautioned that if the government fails to attract foreign investment or sign the Letter of Intent (LOI), the entire IMF program could be at risk. He advised the government not to bypass IMF conditions, as doing so could worsen the economic situation.
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