Pakistan Seeks Larger IMF Bailout As Economic Challenges Mount.
Pakistan is in talks with the International Monetary Fund for a substantially larger and longer bailout package to help stabilize its economy amid growing difficulties.
Official sources indicate Islamabad is requesting between $6-8 billion in financial support from the IMF over 3-4 years under an Extended Fund Facility program. This would far exceed the $6 billion, 39-month arrangement agreed upon in 2019.
The IMF has confirmed discussions are ongoing but remains tight-lipped on further details. Spokesperson Julie Kozack noted ongoing meetings between Fund representatives and Pakistani authorities but did not comment on potential terms of a new deal.
Pakistan faces considerable economic headwinds as talks continue. A tax amnesty scheme intended to boost revenues failed to meet targets, and the IMF has resisted certain tax exemptions. Inflation also remains elevated.
In its assessment, the lending institution urged Pakistan to curb discretionary powers over tax policy. It called for reforming rules pertaining to NGOs, charities and pensioners.
The IMF likewise highlighted the need to remove preferential treatment in real estate and construction that undermines fiscal efficiency. Signs indicate tougher deliberations are likely as Pakistan seeks to secure larger and longer-term foreign support.
A successful conclusion of an agreement could help address both short-term economic stabilization and longer-term structural challenges. Much rides on the outcome of discussions between the two sides in the coming weeks.
