Pakistan has said that it intends to negotiate a “longer and larger” economic bailout package with the International Monetary Fund (IMF).
Newly appointed finance minister Aurangzeb Khan in a formal interaction with journalists hinted at a potential reduction in the central bank’s policy rate, digitising tax system and enhancing and broadening the tax base, The Dawn reported.
Khan added that he expected the IMF team in Islamabad this week for a second review of the ongoing $3 billion agreement and that talks would also continue on the sidelines of the IMF and World Bank’s spring meetings in April at Washington.
Khan was ambiguous on whether Pakistan would seek to augment the bailout package with risk-related financing from the IMF.
Pakistan needed to give importance to the economic stability and that would need a longer and larger programme from the lending agency, he noted.
In his second term in office, Pakistani PM Shehbaz Sharif had clearly said that there have been enough of discussions and debates that have taken place and that it is high time to implement economic reforms.
Some of the reforms, he said would include the urgent privatisation of state-owned enterprises and the first on the list would be the Pakistan International Airlines. Some of the major things that the government was considering was to provide a policy framework and let the private sector step in and lead the businesses.
One of the major issues facing Pakistan is inflation and the minister emphasised the urgent need to tackle it in a phased manner. On issues of rate cuts, he insisted that the policy rates would be brought down over a period of time.
Last year, Pakistan secured a last minute $3 billion short-term financial package from the IMF as it came very close to defaulting. Back then high prices of fuel and low foreign exchange reserves had put the economy on the brink.
