Pakistan, IMF near finalization of 1.2$ billion deal

ISLAMABAD: Pakistan is expected to sign an agreement with the International Monetary Fund (IMF) on the issuance of $1.2 billion this week.

Negotiations with the International Monetary Fund (IMF) mission on the program review have entered the final stage.

On Tuesday, Finance Minister Muhammad Aurangzeb, while giving an interview to a foreign news agency in Washington, said that it is hoped that the staff-level agreement will be completed this week.

The second review of Pakistan’s $7 billion Extended Fund Facility is under consideration.

The $1.4 billion Resilience and Sustainability Facility program is also under review. The IMF program stabilized Pakistan’s economy in 2024.

The Finance Minister said that by the end of this year, the Green Panda Bond will be issued in Chinese yuan.

There is a plan to issue at least one billion dollars in the international market next year. All options are open for euro, dollar, or Sukuk bonds.

Muhammad Aurangzeb further said that the government’s privatization program is likely to accelerate in the next fiscal year.

Privatization is an important part of the economic roadmap. Progress is underway in the sale of PIA and three distribution companies.

The opening of routes to Europe and the UK has made PIA attractive to investors.

He said that the privatization of PIA will be the country’s first major transaction after almost two decades. The government has received interest from five major domestic business groups for PIA.

IMF Outlook Report

On the other hand, the International Monetary Fund (IMF) has released an outlook report, which has made a positive forecast for Pakistan’s economy.

According to the IMF report, Pakistan’s economic growth rate in 2025 is predicted to reach 3.5 percent, and GDP growth in 2026 is predicted to reach 4.3 percent.

The report predicts that the inflation rate in Pakistan is likely to be 23.6 percent in 2025 while it is likely to be 14.3 percent in 2026.

According to the IMF, the current account deficit is expected to be 1.8 percent of GDP in 2025, while the current account deficit is expected to decrease to 1.3 percent in 2026.

The outlook report states that the unemployment rate is likely to be 8.3 percent in 2025 and 7.3 percent in 2026.

The report further states that Pakistan has a prominent position among oil-importing countries. The IMF says that despite stability in Pakistan, the challenge of inflation remains.