International Monetary Fund (IMF) logo. File
| Photo Credit: Reuters

The International Monetary Fund (IMF) on Wednesday (February 12, 2025) expressed support for decisive actions by Prime Minister Shehbaz Sharif’s government for the betterment of Pakistan’s economy.

Pakistan and the IMF last year signed a $7 billion Extended Fund Facility (EFF) loan programme to help the cash-strapped country tackle its balance of payment issue while implementing tough conditions.

IMF Managing Director Kristalina Georgieva, who met CM Sharif during the Prime Minister’s visit to the United Arab Emirates, in a post on X said, “I am encouraged by their strong commitment to Pakistan’s IMF-supported reforms and support their decisive actions to pave the way to higher growth and more jobs for Pakistan’s youthful population.”

The comments come amid the IMF team’s visit to Pakistan to scrutinise the judicial and regulatory system as part of the ongoing $7 billion programme to address governance and corruption vulnerabilities.

According to a statement from the PM Office, the premier held a meeting with the IMF chief on the sidelines of the World Governments Summit (WGS) in Dubai where both sides discussed Pakistan’s ongoing IMF programme, and the macroeconomic stability achieved through the government’s comprehensive reform agenda.

The meeting focused on Pakistan’s commitment to implementing structural reforms and maintaining fiscal discipline, “which had been instrumental in restoring economic stability and would be critical in driving sustainable growth”.

The Prime Minister talked about the progress made under the programme, attributing the economic progress to the bailout deal.

Furthermore, he reaffirmed the government’s resolve to sustain reforms, particularly in tax reforms, energy sector efficiency, and private sector development.

It added that the IMF chief commended the country’s efforts “in effectively implementing the IMF-supported programme, highlighting the country’s improving economic performance with rising growth and declining inflation”.

She recognised that Pakistan was “on the growth path and has undergone economic recovery”, further reiterating the IMF’s support for its reform agenda.

The premier was on a two-day visit to the UAE alongside Foreign Minister Ishaq Dar at the invitation of President Mohamed bin Zayed to participate in the WGS.

According to the Associated Press of Pakistan, Finance Minister Muhammad Aurangzeb said the IMF chief was “full of praises” regarding the prime minister’s leadership and commitment to the reform-based programme.

Speaking at a conference organised by the Securities and Exchange Commission of Pakistan, Mr. Aurangzeb highlighted the focus on structural reforms on the taxation side, energy side, state-owned entities (SOEs) reforms, and public finance in terms of right-sizing the federal government and pension reforms.

“That’s what the managing director, Kristalina, was full of praise for Tuesday (February 11, 2025),” he said. “For the prime minister and the leadership and conviction he has shown, and the commitment the country has shown in terms of this reform-based programme, for which we are well underway in that programme,” he added.

The logo of the International Monetary Fund.
| Photo Credit: AP

The executive board of the International Monetary Fund has approved a new $7 billion loan for cash-strapped Pakistan, authorities said Wednesday (September 26, 2024) more than two months after the two sides said they had reached an agreement.

The loan, which Islamabad will receive in installments over 37 months, is aimed at boosting Pakistan’s ailing economy, officials added.

Prime Minister Shehbaz Sharif in a statement hailed the deal that his team had been negotiating with the IMF since June. He thanked Kristalina Georgieva, the head of the IMF and her team, for the approval.

Islamabad expects to receive the first installment of the loan soon, though its exact date was not immediately known.

The development comes more than two months after the IMF reached a staff-level agreement with Pakistan for the new loan. It also came a day after officials said the global lender’s executive board would approve the loan on Wednesday (September 25, 2024), adding that Pakistan had met all the conditions set by the lender.

Pakistan for decades has been relying on IMF loans to meet its economic needs.

Mr. Sharif thanked China and other friendly countries for facilitating Pakistan’s deal with the IMF.

Pakistan’s Prime Minister Shehbaz Sharif. File
| Photo Credit: Reuters

Cash-strapped Pakistan will privatise all state-owned enterprises, including the loss-making Pakistan International Airlines, Prime Minister Shehbaz Sharif announced on May 14, broadening the government’s initial plans to make only loss-making state firms private.

The announcement to privatise state-run enterprises barring strategic ones comes a day after Pakistan started negotiations with the International Monetary Fund (IMF) for a new long-term Extended Fund Facility (EFF).

Mr. Sharif announced this while chairing a review meeting on the privatisation process of loss-making state-owned enterprises (SOEs), according to media reports.

During the meeting, he said that apart from strategic state-owned firms, all other enterprises — profitable or loss-making — will be privatised, Geo News reported.

Asserting that the government’s job is not to do business but to ensure a business and investment-friendly environment, Mr. Sharif directed all ministries to take action and cooperate with the Privatisation Commission.

Underscoring the need for the privatisation process to be transparent, he ordered the privatisation process of Pakistan International Airlines (PIA) to be televised, including the bidding and other important steps. The PIA’s privatisation is in its final stage, the report said.

Pakistan’s ailing national flag carrier stood as the country’s third-highest public sector loss-making entity, requiring Pakistani Rs. 11.5 billion per month solely for servicing its debts.

The process of privatisation of other institutions will also be broadcast live, the report said.

A roadmap of the Privatisation Programme 2024-2029 was also presented during the meeting, The Express Tribune newspaper reported.

Ministers were informed that loss-making SOEs were to be privatised on a priority basis and that a pre-qualified panel of experts was being appointed in the Privatisation Commission to speed up the sell-off process, the report said.

Prime Minister Sharif-led government has pushed for the privatisation of several state-owned enterprises to tackle the burden on the exchequer and the prevailing financial crunch.

Previously, debt-struck Pakistan had plans to privatise only loss-making state-owned enterprises, the Dawn newspaper reported.

On May 12, Finance Minister Muhammad Aurangzeb said that privatisation is necessary to achieve economic stability in the country.

“You have to move towards privatisation if you want economic stability in the country,” Mr. Aurangzeb said while speaking at the Pre-Budget Conference 2024-25 here.

Last week, Deputy Prime Minister Ishaq Dar said the government would limit its business only to strategic and essential SOEs under its domain and their number would be reduced from 40 after scrutiny.

Privatisation has long been on the Washington-based IMF’s list of recommendations for Pakistan, which is struggling with a high fiscal shortfall, the report said.

Pakistan narrowly averted default last summer, and the economy has stabilised after the completion of the last IMF programme, with inflation coming down to around 17% in April from a record high of 38% last May.

The country is still dealing with a high fiscal shortfall, and while the external account deficit has been controlled through import control mechanisms, it has come at the expense of stagnating growth, which is expected to be around 2% this year compared to negative growth last year.