Finance Minister Muhammad Aurangzeb stated on Thursday that changes are necessary if the nation is to get free of the Washington-based lender, as the government led by Prime Minister Shehbaz Sharif awaits the approval of the IMF Executive Board for a new rescue package.
Speaking at the groundbreaking ceremony of the Securities and Exchange Commission of Pakistan (SECP) head office in Islamabad, Aurangzeb stated, “Reforms are essential to get rid of IMF […] the country will develop only through economic reforms.” He also mentioned that the private sector is being encouraged to play a role in the economy.
The finance minister’s comments coincide with the government’s agreement last month to a $7 billion, 37-month rescue program with the IMF, which is anticipated to be approved by the executive board of the agency.However, the finance minister claims that the board’s approval is contingent upon friendly nations analyzing $12 billion in debt, including $5 billion from Saudi Arabia, $4 billion from China, and $3 billion from the United Arab Emirates (UAE), over a three-to five-year period.
The cash-strapped nation has been experiencing economic difficulties for months due to a number of issues, such as declining foreign exchange reserves and a devaluation of the local currency, among others.
Despite achieving a primary balance of Rs0.952 trillion, or 0.9% of GDP, Islamabad is facing an increasingly dire debt trap because the federal government’s net revenue receipts are not even close to covering one major item of expenditure for the fiscal year 2023–2024.
