Pakistan will negotiate an Extended Fund Facility (EFF) with the International Monetary Fund (IMF) in Washington next month, according to the country’s Finance Minister Muhammad Aurangzeb as the government seeks to ease a full-fledged economic crisis.
Pakistan’s $3 billion standby agreement with the global lender expires on April 11, and the two sides achieved a staff-level agreement earlier this week to disburse the final tranche of $1.1 billion.
The US has also been “very supportive” in the matter, the minister said.
Prime Minister Shehbaz Sharif, after he was sworn in for his second consecutive term following a national election marred by allegations of rigging, had directed his finance team to begin work on seeking an extended fund facility from the IMF.
He termed a long-term bailout from the IMF “inevitable” on Thursday.
The IMF had also said it would support formulating a new economic program for the country if it asks for one.
The global lender’s rescue package last summer had helped Pakistan avert a sovereign default but, to secure it, the country had to revise its budget, and raise interest rates, taxes, and electricity and gas prices.
As a result, during the period, Pakistan struggled through inflation as high as 38%, historic depreciation in its currency, and contraction of the economy.
