Pakistan, IMF begin talks for fresh loan

Talks between Pakistan and the International Monetary Fund (IMF) for a fresh loan have begun in Islamabad on Monday.

Pakistan is seeking a $6 to $8 billion bailout package from the international lender for three to four years to address its financial woes.

A mission team led by Nathan Porter, IMF’s Mission Chief to Pakistan is holding talks with the Pakistani delegation led by Finance Minister Muhammad Aurangzeb.

Sources privy to the development said Islamabad might have to take more tough decisions including increasing electricity and gas tariffs.

Briefing the IMF delegation, Mr. Aurganzeb said the country’s economy has improved after the IMF loan package and Islamabad is ready to sign a fresh loan programme for further improvement.

The IMF mission expressed satisfaction with the steps taken by Islamabad for the recovery of ailing economy.

In its staff report earlier this week, the IMF acknowledged Pakistan’s economic improvement, however, it warned that the outlook remains challenging, with downside risks remaining exceptionally high.

The country narrowly averted default last summer, and its $350 billion economy has stabilised after the completion of the last IMF programme, with inflation coming down to around 17% in April from a record high of 38% last May.