Cash-Strapped Pakistan Commences Talks With IMF For Vital Second 710 Million Dollar Tranche Of 3 Billion Loan

Pakistan has commenced discussions with the International Monetary Fund (IMF) concerning the release of the second 710 million dollar tranche from a 3 billion dollar bailout package, as reported by Indian Express.

These talks, led by Caretaker Finance Minister Dr. Shamshad Akhtar and IMF's mission chief for Pakistan, Nathan Porter, have begun with much praise.

Porter acknowledged the government's efforts to meet the first-quarter targets and discussed ongoing economic measures, but refrained from significant commendation.

The discussions pave the way for detailed conversations about future reforms under the nine-month bailout package, set to conclude by March next year.

During the meeting, Porter raised inquiries about Pakistan's upcoming general elections and the operations of the Special Investment Facilitation Council, two factors impacting the nation's political and economic landscape.

Following the IMF-Pakistan session, Pakistan announced the date for general elections, which is set for 8 February, eliminating previous uncertainty.

The election date's clarity will be considered during negotiations, although the IMF has not explicitly attached conditions to it.

The discussions encompassed the assessment of the 3 billion dollar short-term loan agreement named the Standby Arrangement (SBA).

Pakistan's measures to enhance economic conditions, including stringent control over expenditures, restrictions on the development program, and reductions in subsidies and provincial fiscal controls, were outlined.

The Pakistani team also updated the IMF mission chief on the power sector's circular debt and strategies to address it.

The government reported that targets for Net International Reserves (NIR) were generally in line with the first-quarter target, but the second-quarter target poses a challenge.

Technical-level discussions with relevant ministries and agencies will continue in the coming weeks, with crucial conversations centering on structural reforms, national accounts, and climate-related public investment management assessment action plans.

Finance Minister Akhtar reiterated the government's commitment to cooperating with the IMF for the successful completion of the SBA and the attainment of economic objectives.

The IMF approved a 3 billion dollar loan for Pakistan in July, with the first 1.2 billion dollar tranche already disbursed.

This loan addresses Pakistan's balance of payments crisis and declining foreign exchange reserves.