ISLAMABAD – Pakistan has decided to enter into another loan programme with the International Monetary Fund (IMF) and the formal intention would be made during the finance minister’s visit to Washington on April 12. An official source at the Ministry of Finance said the government had decided to enter into another programme with the IMF after concluding the fifth review of the under suspension $11.3 billion Standby Arrangement (SBA) in June this year.
The source said the formal negotiations for the new loan programme would begin soon after the announcement of the federal budget, adding that Finance Minister Dr Hafeez Shaikh would be discussing Pakistan’s intention with the IMF authorities during his visit from April 12 to 14. However, the source said, it was yet to be decided whether Pakistan should first receive the remaining two trenches of $3.4 billion from the IMF or opt to carry them forward in the next programme.
He said the Finance Ministry was actively considering ending the existing suspended loan programme and negotiating a fresh loan programme with the IMF authorities under new conditions. The source said after the completion of the fifth review in June, Pakistan would request the IMF to enter into a new loan programme. However, he said, the IMF would agree to a new loan programme only if the government managed to control the fiscal deficit at 5 percent of GDP during the current fiscal year.
The IMF mission would be visiting Pakistan in May this year again to assess the economic performance for the fifth review on the performance benchmarks agreed during the March visit.
