IMF Executive Board's schedule up to September 4 'excludes Pakistan'

The International Monetary Fund (IMF) has released its executive board meeting schedule through September 4, 2024, and sources in the Finance Division indicate that Pakistan, which direly needs external funding to bail out its economy, is not included on the agenda.

Despite this, the government remains optimistic that the country will secure approval for a $7 billion bailout package from the IMF next month, sources privy to the matter told Geo News.

Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb last week dismissed concerns about the IMF declining the staff-level agreement, exuding confidence that "the lender will approve it next month".

Pakistan and the IMF reached an agreement on the 37-month loan programme in July. The IMF said the programme was subject to approval from its Executive Board and obtaining "timely confirmation of necessary financing assurances from Pakistan's development and bilateral partners".

Sources said the Ministry of Finance was upbeat on the IMF's final approval of the loan programme next month.

The government is actively working to roll over $12 billion in loans from China, Saudi Arabia, and the United Arab Emirates, they added.

Additionally, Pakistan has requested an extra $1.2 billion loan from Saudi Arabia to bridge a $2 billion financing gap.

According to insiders, Pakistan already owes $5 billion to Saudi Arabia in the form of cash deposits. It must be noted that Pakistan also holds $4 billion in deposits from China and $3 billion from the UAE.

These amounts are separate from an additional $4.5 billion in commercial loans, including those from China, sources quoted the ministry officials as saying.

Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to meet gross financing needs under the IMF programme, Finance Minister Aurangzeb said in July following a trip to China to seek energy sector debt reprofiling.

Rollovers or disbursements on loans from Pakistan's long-time allies, in addition to financing from the IMF, have helped Pakistan meet its external financing needs in the past.

During an analyst briefing following the central bank's decision in July to cut rates by 100 bps, the central bank chief said he expected rollovers of $16.3 billion in the fiscal year to June 2025 — more than half of Pakistan's $26.2 billion external financing requirement.

The release of the IMF's latest schedule is a significant development, but the absence of Pakistan's loan approval on the agenda is a cause of concern as it is critical for the country to secure the loan to shore up its sinking economy.

"Just like in the past, there is unnecessary noise about the staff-level agreement not being approved, but we are hopeful that the IMF board will give its approval in September," Aurangzeb stated in an exclusive interview with Geo News last week.