Pakistan’s caretaker government is in talks with China and Saudi Arabia to secure $11 billion, aiming to prevent a full-scale economic crisis. The objective is to maintain the International Monetary Fund (IMF) bailout program.
Dr. Shamshad Akhtar, the caretaker Finance Minister, disclosed that the government is developing an economic revival strategy. Although the caretaker government has limited authority to implement significant structural reforms, it is committed to meeting IMF conditions, which would enable the release of a $700 million loan installment. Discussions with the IMF are scheduled for late October.
Dr. Akhtar stressed the importance of fulfilling Pakistan’s commitments under the IMF program for economic stability. In June, the IMF tentatively agreed to a nine-month Stand-by Arrangement worth approximately $3 billion.
Despite ongoing initiatives, Pakistan’s financing needs surpass available funding. The government hopes that collaboration with stakeholders will attract project pipeline disbursements and revive policy-based financing from international bodies.
To meet external financing requirements, Pakistan is actively pursuing concessional funding from multilateral institutions, including the World Bank, Asian Development Bank, and Islamic Development Bank, targeting $6.3 billion.
The Finance Minister cautioned about the impact of rising international commodity prices, particularly Brent crude oil at $95 per barrel in September, on Pakistan’s external stability.
In addition to seeking external financial relief, the caretaker government is focusing on domestic reforms. Efforts are underway to amend tax laws to effectively include the retail, agricultural, and real estate sectors, potentially generating an additional ₹3 trillion in revenue.
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Source: MINT
