The International Monetary Fund (IMF) on 18 November revised Pakistan’s foreign loan requirements to $25 billion for the current fiscal year, reducing it by $3.4 billion in a big relief to the cash-crunched country.
The global lender has also lowered the country’s economic growth projection to just 2%, turning down the government’s external forecast along with macroeconomic forecasts.
The IMF delegation wrapped up two-week-long talks with Pakistani officials on 15 November, announcing a staff-level agreement had been reached to release $700 million in the second tranche of an already agreed-upon $3 billion loan.
The IMF, in its report, said that in comparison with July this year, they have lowered the foreign loan requirements for this fiscal year from $28.4 billion to $25 billion. In a period of four months, the Pakistani government has already borrowed $6 billion while it expects rollovers of $12.5 billion,
Imdadullah Bosal, Finance Secretary of Pakistan, on 16 November said that the interim government was comfortable that it would secure the needed financing to remain afloat.
The global lender also declined to accept the finance minister’s projection of imports worth $54.5 billion for FY24. Moreover, the IMF also did not agree with Pakistan’s projected $4 billion to $4.5 billion current account deficit during the ongoing fiscal year from the previously projected figure of $6.5 billion. They have also not accepted their economic growth forecast of 3% to 3.5% in the ongoing fiscal year.
The lender has also cut the inflation rate forecast to 22.8% from 25.9%. This move should provide space for lowering the interest rates, at least in January’s monetary policy announcement.