Interim Govt To Hold Talks With IMF On Quarterly Review In October

SBP foreign exchange reserves can cover only a month and a half of imports, while the country requires $20bn this year

Interim Govt To Hold Talks With IMF On Quarterly Review In October

Caretaker Finance Minister Dr Shamshad Akhtar has announced that the government will start discussions with the International Monetary Fund (IMF) on the quarterly review at the end of October in order to get the next tranche.

She stated in a briefing to the Senate Standing Committee on Finance and Revenue on Thursday that the macroeconomic indicators were "very bad" when she assumed charge on August 17. She said, "The "good news" is that it is dropping and inflation has reached 38 percent.”

Dr Akhtar said that in 2023, inflation reached a record level and the GDP declined to 0.3 percent, but the minister also believes that inflation has stopped increasing but is not declining due to high demand.

She said, “In 2023, the production of major industries decreased by 10 percent.” Agricultural productivity also declined by 2.5 percent in 2022, she added.

The interim minister said the country’s economy was affected by the floods and the Ukraine war, adding that in 2023, 4 million people became victims of poverty, and unemployment in the country has reached 10 percent.

The federal minister said Pakistan is under pressure due to debt repayment. She said that the interim government was striving to stabilize institutions in order to revive the economy and that her ministry was developing an economic recovery plan by implementing short- and long-term actions.

“We're attempting to make wiser economic choices to support the coming administration,” she added. She stated that the provinces have received instructions to cut costs.

The interim government is committed to carrying out the IMF program, the minister reassured the senators. She added that while the country needs $20 billion this year, the State Bank of Pakistan's (SBP) foreign exchange reserves can only fund 1.5 months' worth of imports.

The finance minister is optimistic that the economy of the country is improving. She went on to say that Pakistan anticipated further assistance from allies. "We have requested financing from Saudi Arabia and China," she added.

The minister said the government is also demanding oil on loan from Riyadh.