Pakistan and the visiting staff mission of the International Monetary Fund (IMF) would start policy-level talks for a new bailout package on Monday, sources said.

The negotiations would focus on the size and terms of the new loan programme and are expected to finalize the objectives and conditions for the upcoming fiscal year.

Future fiscal targets for tax and non-tax revenue would also be set and macroeconomic goals for the next fiscal year would also be determined

Sources said that negotiations aimed at finalising an agreement on the new loan programme by the end of this week

An IMF staff-level agreement is anticipated upon the conclusion of the policy-level talks.

The IMF mission is conducting a thorough review of Pakistan’s economic targets and performance. The mission is also expected to meet with Prime Minister Shehbaz Sharif this week.

The outcome of the policy-level negotiations would pave the way for a new IMF programme to support Pakistan’s economic recovery efforts.

The South Asian country has not shared the amount of loan it seeks from the Fund, but in February Bloomberg News reported the amount to be at least $6 billion. The country would seek to negotiate an Extended Fund Facility with the IMF, the report added.

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Pakistan last month completed a short-term $3 billion programme, which helped stave off sovereign default, but the government of Prime Minister Shehbaz Sharif has stressed the need for a fresh, longer-term programme.

In its staff report earlier this week, the IMF acknowledged Pakistan’s economic improvement, however, it warned that the outlook remains challenging, with downside risks remaining exceptionally high.

The country narrowly averted default last summer, and its $350 billion 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.