WASHINGTON – IMF chief Kristalina Georgieva said on Thursday that Pakistan is seeking a potential follow-up programme to its nine-month $3 billion Stand-By Arrangement (SBA), but it has important issues to solve.
Speaking at an event at the Atlantic Council think tank, Georgieva said that Pakistan is successfully completing its existing programme with the IMF and its economy is performing somewhat better, with reserves now building up.
Flagging issues that the struggling South Asian nation still needs to address, Georgieva said, “There is a commitment to continue on this path, and the country is turning to the fund for potentially having a follow-up programme.”
“There are very important issues to be solved in Pakistan: the tax base, how the richer part of society contributes to the economy, the way public spending is being directed and of course, creating … a more transparent environment.”
Pakistan and the IMF last month reached a staff-level agreement on the second and last review of the $3 billion stand-by arrangement, which, if cleared by the global lender’s board, will release about $1.1 billion to the struggling South Asian nation.
The IMF’s board is expected to review the matter in late April, but no firm date has been set, a spokesperson said.
Both sides have also spoken about negotiating a longer-term bailout and continuing with necessary policy reforms to rein in deficits, build up reserves, and manage soaring debt servicing.