Pakistan and IMF near agreement on $8 billion bailout package

Pakistan has set quite challenging revenue targets in its annual budget to help it win approval from the IMF for a loan to fend off another economic meltdown, even as the domestic anger rises at the new taxation measures implemented in the country.

Ali Pervaiz Malik, Minister of State for Finance said, “We hope to culminate this IMF process in the next 3 or 4 weeks. I think it will be north of $6 billion”, although IMF’s validation is now the primary focus.

Pakistan has set a tax revenue target of 13 trillion rupees ($47 billion) for the fiscal year that began on the 1st of July, a nearly 40 percent jump from 7the previous year and a sharp drop fiscal deficit from 7.4 percent of 2023 to 5.9 percent in 2024 of the GDP.

The minister said the point of making a tough budget was to use it as a stepping stone for an International Monetary Fund Programme, adding that the IMF was satisfied with the revenue measures taken based on the series of talks conducted between the two sides.

“There are no major issues left to address, now that all major prior actions have been met including the budget.” Malik said.

While the budget may win approval from the IMF, it will fuel public anger, according to analysts. “Obviously the budget reforms are burdensome for the local economy but the IMF program is all about stabilisation,” the Minister said.

Pak’s benchmark share index (KSE), opened a new tab and rose one percent during trading today reaching a record intraday high of 80348 points at 06.40 GMT following the news.

The index has rallied roughly 10 percent since the budget was presented on June 12 helped by continued hopes of getting an IMF bailout package to secure the struggling economic conditions of the country.