KARACHI: Pakistan is looking to clinch a staff level agreement on an International Monetary Fund (IMF) bailout of more than $6 billion this month after addressing all of the lender’s requirements in its annual budget, its junior finance minister told Reuters.
The South Asian country has set challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to stave off another economic meltdown, even as domestic anger rises at new taxation measures.
“We hope to culminate this (IMF) process in the next three to four weeks,” Minister of State for Finance, Revenue and Power Ali Pervaiz Malik said on Wednesday, with the aim of thrashing out a staff level agreement before the IMF board recess.
“I think it will be north of $6 billion,” he said of the size of the package, though he added at this point the IMF’s validation was primary focus.
The IMF did not respond immediately to a request for comment.
Pakistan has set a tax revenue target of 13 trillion rupees ($47 billion) for the fiscal year that began on July 1, a near-40 percent jump from the prior year, and a sharp drop in its fiscal deficit to 5.9 percent of gross domestic product from 7.4 percent the previous year.
Malik said the point of pushing out a tough and unpopular budget was to use it as stepping stone for an IMF program, adding the lender was satisfied with the revenue measures taken, based on their talks.
“There are no major issues left to address, now that all major prior actions have been met, the budget being one of them,” Malik said.
While the budget may win approval from the IMF, it could fuel public anger, according to analysts.
“Obviously they (budget reforms) are burdensome for the local economy but the IMF program is all about stabilization,” Malik said.
Sakib Sherani, an economist who heads private firm Macro Economic Insights, said a quick deal with the IMF was needed to avoid pressure on Pakistan’s foreign exchange reserves and the currency given the country’s maturing debt repayments and the effects of unwinding of capital and import controls that were applied earlier.
“If it takes longer, then the central bank may be forced to temporarily re-instate import and capital controls,” he said. “There will be a period of uncertainty, and one casualty is likely to be the rally in equities.”
Pakistan’s benchmark share index has rallied roughly 10 percent since the budget was presented on June 12, helped by continued optimism on getting an IMF bailout package to bolster the struggling economy.

KARACHI: The top American diplomat in Pakistan said on Tuesday people mostly focused on bilateral challenges when discussing United States-Pakistan ties, obscuring the long and mutually beneficial relations between the two countries.
Pakistan and the US cultivated strong defense ties during the Cold War days, yet their relationship was also tested by divergent priorities on various issues. The two countries particularly forged close ties when Pakistan aligned with the US during the Soviet invasion of Afghanistan in 1979.
However, more recent times have seen tensions escalate, particularly after 9/11, when US officials criticized Pakistan for not sufficiently supporting the American military efforts against the Taliban in Afghanistan.
Additionally, the perception of US interference in Pakistani politics has been a contentious issue, highlighted by former prime minister Imran Khan’s allegations that Washington orchestrated his ouster in April 2022, a claim the US authorities have denied.
“It has become commonplace to observe that the United States and Pakistan have sometimes struggled to understand each other,” Ambassador Donald Blome said while addressing a ceremony in Islamabad organized to celebrate the US Independence Day. “But that observation can obscure the long history of partnership and cooperation between our two countries.”
He described the ties between the two states as a journey toward increased prosperity and security for both nations, adding that each step of the way was important.
“I want to stress the strength and durability of the US-Pakistan partnership and as we celebrate Independence Day, we also celebrate the steps we have taken together,” he added.
Ambassador Blome noted the US companies had played a major role in strengthening Pakistan’s economy, adding that his country was “proud to be Pakistan’s largest export market globally.”
He also said the US was helping Pakistan’s energy infrastructure project by upgrading Mangla and Tarbela with new GE turbines.
“The originals lasted for 50 years, and the new versions will last another 50 years – a 100 year investment in Pakistan funded directly, not through loans,” he said. “That’s what we mean by commitment.”
Ambassador Blome also highlighted his country’s support to cultural activities in Pakistan, adding its diplomatic mission also sends over 500 Pakistanis to US each year on educational and professional exchanges.