Areej Malik’s Post

Pakistan is currently grappling with a formidable fiscal dilemma, as it seeks to secure a minimum of PKR 8.5 trillion to cover its anticipated budget deficit of PKR 8,500 billion for the fiscal year 2024-25. This marks a significant increase from the initially budgeted PKR 7,506 billion for 2023-24 which was later revised upwards to PKR 8,388 billion. The primary deficit target for 2024-25 stands at 2% of GDP, a notable disparity compared to the International Monetary Fund's forecast of 0.4% as indicated in their May 2024 Stand By Arrangement review. This widening gap highlights Pakistan's need for additional financial resources to bridge the deficit. It underscores the challenge of managing its substantial domestic debt interest payments without resorting to further borrowing. Data visualization by Brand Nib #BudgetFY25 #IMF #Pakistan #economy #borrowing

The International Monetary Fund (IMF) has announced that it will review Pakistan's loan request on September 25, bringing an end to uncertainty around the new $7 billion bailout. The IMF had signed a staff-level agreement with Islamabad two months ago, but the delay in ratification had fueled speculation that the government was facing difficulties in meeting its stipulations. The IMF announcement comes as a relief to Pakistan, which is struggling to overcome a serious legitimacy crisis and revive its moribund economy. The approval of the programme is crucial for the coalition government to improve its ratings and kick the default can further down the road. However, the new IMF loan is not a solution to Pakistan's deep-seated economic woes and structural issues. The government is preparing to further tighten the noose around taxpayers and possibly bring in a supplementary or 'mini' budget to meet the Fund programme's revenue targets. The burden of additional revenue measures will be borne by taxpayers, both corporate and individual, which is not how crisis-hit nations break out of the debt trap. The new IMF loan is surely not going to be Pakistan's last bailout, and the government needs to put its fiscal house in order to avoid further economic crises. . . . #IMF #Pakistan #EconomicCrisis #Bailout #DebtTrap #Taxation #EconomicReforms #tribunetrends

The IMF has urged Pakistan to introduce a PKR 500 billion mini-budget after the Federal Board of Revenue (FBR) fell short of its tax targets, creating potential hurdles for the next loan installment. The mini-budget is viewed as a crucial step to bridge the revenue gap.  . . #CandidPakistan #Pakistan #IMF

The International Monetary Fund (IMF) has set three new conditions for Pakistan to receive a $7 billion loan. The conditions include: 1. Ending subsidies on electricity bills by September 30 2. Not introducing any policies that contradict the commitments made under the loan program 3. Consulting the Ministry of Finance before taking any actions that could affect the loan program's structural benchmarks and key actions The IMF is reviewing the budgets of provinces and has observed that Punjab and Sindh's revenue estimates are too high, which could make it difficult to achieve cash surplus targets. #corpwire #IMFConditionsForLoan #PakistanEconomicCrisis #LoanProgrammeChallenges

An IMF mission is set to visit Pakistan this month to discuss a potential new programme, including policies and reforms for the fiscal year 2025 budget. Pakistan recently completed a $3 billion short-term programme, avoiding default, but aims for a longer-term solution. The IMF emphasizes the importance of accelerating reforms, balancing payments needs, and stabilizing the economy, which has shown signs of improvement with reduced inflation but faces fiscal challenges and stagnant growth. Finance Minister Muhammad Aurangzeb anticipates agreement on a new IMF loan, likely seeking at least $6 billion and additional financing under the Resilience and Sustainability Trust. #pakistan #usa #imf #budget #reforms #challenge #sustainability

It takes one to know one. The only IMF structural adjustment program ever successfully implemented by Pakistan was the 2013–2016 Extended Fund Facility, completed under the stewardship of then-finance minister Ishaq Dar. By the end of that program and the government’s term, Pakistan was on an external debt borrowing spree, the economy was set to create a crater in the current account, with the deficit reaching 5.5 percent of GDP, and the country was placed on the FATF’s grey list. By any measure, Pakistan’s only successfully completed IMF program was, in fact, a complete failure. The only notable ‘successes’ achieved under that program were the sell-offs of government minority shareholding in various financial institutions, the creation of the “non-filer” income tax return category, and a fall in exports – both in absolute terms and as a percentage of GDP. Yet, the program was deemed a success by both the IMF and the government of Pakistan because Dar was able to deliver what the Fund valued most: adherence to quantitative targets. this piece is written by Muhammad Adil Mansoor https://lnkd.in/dxf5bNRU

Negotiations started between Pakistan and IMF for a new loan program Islamabad: Negotiations between Pakistan and the IMF on the budget and new loan program have begun, with Pakistan expressing the government’s commitment to continue and expand its reform agenda with the International Monetary Fund. The Ministry of Finance issued a statement on the introductory session of negotiations between Pakistan and the International Monetary Fund (IMF) regarding the new loan program. It was led by IMF Mission Chief Nathan Porter. Governor State Bank, Chairman FBR and senior officers of Finance Ministry also participated in the meeting. According to the statement, the purpose of the meeting is to open further discussions with the International Monetary Fund. During the meeting, the Finance Minister thanked the IMF delegation for the successful completion of the standby arrangement and apprised them of the improvement in macroeconomic indicators. According to the Ministry of Finance, the government’s determination to continue and expand the reform agenda was expressed. It should be noted that the talks between Pakistan and the IMF will continue for about 2 weeks in which the new loan program will also be consulted on the budget for the new fiscal year. #Negotiations #started #Pakistan #IMF #loan #program

🔴BREAKING NEWS: There is hope for Pakistan! It might get a new loan from the IMF soon!! 🤔What happened? ▪ Pakistan had recently completed a short-term $3 billion loan program with the International Monetary Fund which helped it avoid sovereign debt default. ▪ After that, Pakistan immediately opened discussions with the IMF for a new larger loan facility! ▪ Now, the IMF has announced that the lender and Pakistan have made significant progress towards a staff-level agreement! 🧐Why? ▪ Pakistan is reportedly seeking a fresh $6-8 billion loan to help its economy grow. ▪ However, the loan may be difficult to get as the IMF has mandated strict policy reforms! ▪ Pakistan has been asked to raise revenues (so higher taxes), trim expenditures, and undertake structural reforms to strike a deal. ▪ A few controversial demands of the IMF were to increase the GST rate to 18% and tax monthly pensions above PKR 1,00,000!!! ▪ To top it all off, the IMF wants parliamentary approval for all the reform and policy actions!! 😲Interestingly: ▪ 40% of Pakistani citizens are now in poverty. ▪ Yet, Pak PM Shehbaz Sharif and his team have assured the IMF mission that they would implement all its conditions! ❓Pakistan has already received 23 bailout programs from the IMF and several loans from other countries! Can it survive without begging for money?? Follow Jobaaj Stories (the media arm of Jobaaj.com Group for more) #pak #pakistan #imf #loans #economy #geopolitics #currentaffairs

Preparations for Obtaining an Additional One Billion Dollar Concessional Loan from the IMF are underway, with the government focusing on securing favorable terms to boost Pakistan's economic stability. This additional funding aims to support fiscal reforms, strengthen the country's reserves, and pave the way for long-term growth. As Pakistan navigates its financial challenges, the IMF loan is seen as a crucial step in ensuring sustainable development and addressing urgent financial needs. #IMFLoan #PakistanEconomy #FiscalReforms #EconomicStability #FinancialSupport

Pakistan's government has ramped up borrowing by 71% to Rs5.301 trillion between July and April, straining its budgetary balance and signaling heightened cash demands to cover deficits and debt interests. With interest costs skyrocketing to Rs4.2 trillion, consuming 61% of total revenue in the first half of FY24, analysts debate the State Bank of Pakistan's potential interest rate adjustments amidst easing inflation but looming economic adjustments per IMF discussions. Private sector loan demands remain subdued, contrasting the government's borrowing spree, as efforts towards an IMF staff-level agreement and structural reforms to boost tax revenue and manage sectoral debts take center stage. #pakistaneconomy #sbp #imf #bank #cash #liquidity #tax