Aurangzeb confirms request for talks to be sent to IMF

ISLAMABAD: Newly sworn-in Minister for Finance Mohammad Aurangzeb on Monday said that the current fiscal year of 2024 would be a difficult financial year, adding that now there was no time for mere talks but it’s time for action.

The minister confirmed that Pakistan will send formal request to the International Monetary Fund (IMF) for holding crucial parleys with them as it was crucial for the country’s economy.

It is hoped that the talks with the Fund staff would commence from current week, he further said.

However, top official sources confirmed to The News that Pakistani side would dispatch email to the IMF headquarters in Washington DC for sending its review team to Islamabad for holding crucial talks under $3 billion Standby Arrangement Programme (SBA) and release of last tranche worth $1.1 billion.

Pakistan might also request to commence talks for fresh medium-term bailout package under $6 billion Extended Fund Facility (EFF) with the strong chances to augment it with climate financing of $1.5 to $2 billion more in order to secure more financing from the IMF compared to the allocated quota for Pakistan.

Soon after taking oath and attending the maiden session of the federal cabinet, Aurangzeb, while talking to The News, confirmed that the parleys with the IMF team were expected to commence within this week.

When asked about possibility of sending formal request to the IMF for starting parleys under $3 billion SBA which is going to expire on April 12, 2024, he replied that it was hoped that the talks with the Fund staff would start from this week. He stated that he would sit with the media to discuss all these issues soon.

Earlier, on the occasion of taking oath at the Presidency, the newly sworn-in minister showed his resolve to utilise all his energies for resolving the difficulties currently facing by Pakistan.

When asked to comment on the IMF programme, he showed his reluctance to reply it and promised that he would get briefings before saying anything on this subject.

Former Economic Advisor Ministry of Finance Dr Ashfaque Hasan Khan, when contacted on Monday, said that he has always been saying that the main target of the IMF programme was Pakistan’s defence budget.

“Now the cat is out of the bag. India, yes India, has asked the IMF not to allow the diversion of the IMF money towards Pakistan’s defence budget. Don’t forget, India is highly influential in the IMF/ WB,” the expert said.

He said that the IMF deputy managing director, Geta Gopinath, was an Indian citizen. How can they implement India’s desire against Pakistan? Very simple. More currency devaluation, keeping the policy rate of the SBP high and maintaining Primary Surplus in the budget along with restrictions on cutting development budget, he added.

“The only way we can maintain primary surplus is through cutting defence budget. In the last five years, we have reached to a point where country’s defence budget is entirely on borrowed resources. Imagine when a country’s defence budget is on borrowed resources, what will happen to the country’s national security,” Dr Ashfaque said.

The expert on economy gave four major recommendations to Pakistani negotiators who are going to hold parleys with the IMF -- reduce policy rate gradually, no more currency devaluation, budget deficit should be the target and not the primary surplus, and more reliance on reforms rather than on the policy.