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US supports Pakistan’s efforts to reach agreement with IMF

Administration encourages govt to expand economic reforms, says State Department spokesperson
A still from the US State Department briefing video shows spokesperson Matthew Miller responding to a question on May 03, 2024. Screengrab
A still from the US State Department briefing video shows spokesperson Matthew Miller responding to a question on May 03, 2024. Screengrab

The United States administration has said that it supported Pakistan’s efforts to reach an agreement with the International Monetary Fund for a bailout package.

“When it comes to efforts to stabilize its economy, including through reaching an agreement with the IMF, we support those efforts,” US State Department spokesperson Matthew Miller said at a press briefing on Thursday.

The South Asian country’s nine-month economic reform programme expired last month, with the state receiving the final $1.1 billion standby-arrangement tranche.

In its statement, Antoinette Sayeh, the IMF deputy managing director, urged Pakistan to persevere with sound macroeconomic policies and structural reforms beyond the program’s completion.

Challenges remain, including high inflation, which is expected to reach around 20% by June 2024. The IMF recommends maintaining a tight monetary policy to control inflation and further strengthen the financial sector.

The lender also called for accelerating structural reforms in areas such as state-owned enterprises, governance, and climate resilience is crucial for promoting sustainable growth and job creation.

The new government has confirmed seeking a new multi-billion dollar loan agreement with the IMF and finance czar Muhammad Aurangzeb hopes to agree on the contours of the programme in May.

Last month, US Ambassador to Pakistan Donald Blome told a ceremony in Quetta that the administration would work with Pakistan for its economic progress.

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The State Department also spoke on the same wavelength with some suggestions.

“We support the progress that Pakistan has made to stabilize its economy and manage its daunting debt burden,” Miller said and added that the administration asked the government to expand the reforms as suggested by the international lender.

“We encourage the government to prioritize and expand economic reforms to address its economic challenges, and our support for Pakistan’s economic success is unwavering and we will continue to engage with them through technical engagements as well as through our trade and investment ties, all of which are priorities of our bilateral relationship,” said the US State Department spokesperson.

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