IMF board to meet on April 29 to approve $1.1b disbursement for Pakistan

The International Monetary Fund’s (IMF) executive board is set to convene on April 29 to deliberate on the approval of a $1.1 billion disbursement for Pakistan, according to a statement made by the fund on Wednesday.

This allocation represents the final tranche of a $3 billion Stand-By Arrangement (SBA) secured by Pakistan last summer, intended to prevent a sovereign default and concluding at the end of the month.

The South Asian country is pursuing a new, more substantial long-term loan from the IMF. Pakistan’s Finance Minister, Muhammad Aurangzeb, has indicated that a staff-level agreement could be reached by early July for the new program.

While Pakistan has not formally requested the loan yet, ongoing talks are already taking place between the Fund and the government. The country seeks a loan over a three-year period to achieve economic stability and implement significant structural changes.

The nation’s $350 billion economy faces ongoing balance of payments challenges, including nearly $24 billion in debt and interest repayment obligations due in the next fiscal year—triple the amount of its central bank’s foreign currency reserves.

Pakistan’s finance ministry projects economic growth at 2.6% for the fiscal year ending in June, while average inflation is expected to reach 24%, a decrease from 29.2% in fiscal year 2023/2024.