As Prime Minister Shehbaz Sharif-led government eyes International Monetary Fund’s (IMF) Executive Board’s approval of a fresh bailout package, Finance Minister Muhammad Aurangzeb Thursday said that reforms are inevitable if the country is to get rid of the Washington-based lender.
“Reforms are essential to get rid of IMF […] the country will develop only through economic reforms,” Aurangzeb said while speaking at the groundbreaking ceremony of the head office of the Securities and Exchange Commission of Pakistan (SECP) in Islamabad, adding that the private sector is being encouraged to play a role in the economy.
The finance czar’s remarks come as the government, last month, reached a 37-month, $7 billion bailout programme with the IMF which is expected to be approved by the lender’s executive board this month.
The board’s approval, however, as per the finance minister is linked with with $12 billion debt profiling by friendly countries including $5 billion from Saudi Arabia, $4 billion from China and $3 billion from the United Arab Emirates (UAE) for a three to five-year period.
The cash-strapped country for months has been facing economic woes driven by various factors including but not limited to a weakening local currency coupled with depleting foreign exchange reserves and others.
Although Islamabad has achieved a primary balance of Rs0.952 trillion, equivalent to 0.9% of gross domestic product (GDP), the country faces a rapidly escalating debt trap due to the federal government’s net revenue receipts being insufficient to cover even one major expenditure item during the fiscal year 2023-24
