IMF to Assess Pakistan's External Financing Needs Next Week

ISLAMABAD - The International Monetary Fund (IMF) is scheduled to conduct an unscheduled review next week to assess Pakistan's external financing requirements, particularly focusing on a $2.5 billion gap in funding needed for the current fiscal year, reported Alayaran.com.

According to The Express Tribune, citing government sources, the IMF mission, led by Nathan Porter, will commence discussions on Tuesday. This review precedes the formal assessment scheduled for March 2025, which is crucial for the release of a $1.1 billion tranche from a $7 billion IMF package approved in September.

Pakistan has been grappling with securing loans from bilateral creditors, which has intensified the need for external financing. Despite the country's external sector performing better than anticipated, with improved exports and remittances, the necessity for new loans persists to manage repayments of existing debts, particularly those to Western financial institutions.

The IMF had previously projected a $5 billion external financing gap for the period spanning 2024-27, with $2.5 billion required this fiscal year. However, Pakistani officials suggest the gap might be less severe than earlier estimates due to recent economic improvements.

The upcoming IMF visit, occurring just six weeks after the loan approval and four months after the planned review, aims to evaluate Pakistan's adherence to the economic targets set for the July-September quarter.

Further complicating matters, Pakistan is in discussions with China to reschedule approximately $3.4 billion in debt from China's Export-Import Bank, with nearly $750 million due within the current fiscal year.

This review is critical as Pakistan navigates its financial obligations and seeks to stabilize its economy amidst global economic pressures.