Washington DC, Pakistan is seeking a “larger and longer” multi-billion-dollar loan program from the International Monetary Fund (IMF) as part of its efforts to stabilize its economy and address ongoing financial challenges. Federal Minister for Finance and Revenue Muhammad Aurangzeb, who is in Washington for meetings with IMF and World Bank officials, indicated that the exact size and duration of the proposed program would be determined during joint discussions.
According to Press Information Department, Aurangzeb’s visit to the U.S. capital focuses on securing a new financial package to support Pakistan’s economic recovery. Although the Finance Minister did not specify the exact amount Pakistan is seeking, reports suggest that the new bailout could be as large as $8 billion, replacing the current $3 billion agreement.
Aurangzeb, speaking to a group of journalists and think-tanks, emphasized that the loan program is designed to support Pakistan’s priorities. He stated, “I believe it is Pakistan’s programme. It’s not an IMF programme. It’s a Pakistan’s programme and it is supported, assisted, and funded by the IMF.” While it is too early to discuss specifics, Aurangzeb noted that the agreement would likely address key areas such as revenue allocation and taxation.
In response to a question from TRT World, Aurangzeb acknowledged that Pakistan might revisit its National Finance Commission (NFC) award, which allocates revenues between the federation and the provinces, if the new loan program is approved. He explained that this reevaluation would be done in the context of the 18th amendment, which devolved significant powers to the provinces.
Aurangzeb pointed out that sectors like agriculture, real estate, and property construction, which fall under provincial jurisdiction, need to be incorporated into the tax net. He has already initiated discussions with the chief ministers of Punjab and Sindh to explore ways to incentivize these sectors to contribute to the broader tax base.
Pakistan’s ongoing discussions with the IMF come as the organization released its updated World Economic Outlook, indicating that Pakistan’s economy is projected to grow by 2% and face 25% inflation. However, the IMF has forecasted a growth rate of 3.5% for the next fiscal year. Despite these challenges, Aurangzeb reassured stakeholders that Pakistan’s solid reserves, stable currency, and growing exports will help maintain stability and mitigate further rupee devaluation.
During his visit, Aurangzeb also emphasized that Pakistan is ramping up support for industries, agriculture, and information technology to boost national growth above 4% in the coming years. This strategy aims to strengthen the economy and create a sustainable path to recovery.