Pakistan 'looking forward' to continued Chinese support ahead of new IMF deal

WASHINGTON: Finance Minister Muhammad Aurangzeb has asked for "continued support" from China, as Pakistan formally applies for a new programme with the International Monetary Fund (IMF), a statement by the finance ministry stated on Saturday.

The minister sought Beijing's help during a meeting with his Chinese counterpart Lan Fo'an on the sidelines of the IMF and World Bank spring meetings in Washington.

Aurangzeb apprised Fo'an about Islamabad entering into a new programme with the global lending institution and looked forward to China's continued support.

Pakistan has made a formal request to the IMF for another bailout package in the range of $6 to $8 billion under the Extended Fund Facility (EFF) with the possibility of augmentation through climate financing.

However, the exact size and timeframe will only be determined after evolving consensus on the major contours of the next programme in May 2024.

Aurangzeb also briefed his counterpart on the government's priorities, including broadening the tax base, fixing the energy sector, and overhauling the state-owned enterprises (SOEs).

The minister apprised Fo'an about the progress on the China–Pakistan Economic Corridor (CPEC), expressing the government's resolve to accelerate Phase II of the project.

In Phase II, he said, Islamabad will emphasise monetising assets through the operationalisation of Special Economic Zones and relocation of Chinese Private-Owned Companies (POCs).

Meanwhile, in Phase I, the minister added, the government focused on infrastructure development. He lauded China's invaluable contribution to Pakistan's development through initiatives such as the CPEC and support at international financial institutions.

Aurangzeb also expressed gratitude to the Chinese government for the SAFE deposits and their regular rollovers, which have played a crucial role in addressing Pakistan's external financing gaps.

During the meeting with his Chinese counterpart, the finance minister also conveyed condolences on behalf of the leadership and people of Pakistan over the recent terrorist attack against Chinese nationals in Pakistan.

He reaffirmed Pakistan's unwavering commitment to ensuring the safety and security of Chinese citizens and investments in the country.

He stated that Pakistan aimed to tap into the Chinese Bond Market and launch Panda Bonds during the fiscal year 2025-26.

Both sides agreed on the need to continue their cooperation within international institutions, reflecting deep-rooted economic ties between the two countries.

Aurangzeb, who is currently in Washington to hold negotiations with the Fund for a new bailout package and attend World Bank meetings, has been conducting high-level meetings with top officials on the sidelines of his visit.