On 21 March, Prime Minister Shehbaz Sharif highlighted Pakistan’s need for another bailout package from the IMF to sustain across-the-board structural and economic reforms. While presiding over a meeting of the Special Investment Facilitation Council (SIFC), he lamented: “We cannot survive without a new IMF agreement which will span two to three years.” He went on to point out that the IMF had “concluded the review for issuance of the last tranche of USD 1.1 billion that will hopefully be received next month.” Following this tranche, Pakistan “wants to start another programme with the IMF for three years during which the government will take strict measures to introduce deep-rooted structural reforms in the country.” Sharif noted that there was a need for continuing policies and joint efforts by stakeholders for these reforms, and stated that the government would make “tough economic decisions” to come out of an economic crisis and break the “begging bowl and come out of the debt trap.” He called for the support of political parties and provincial governments to “resolve all the challenges and difficulties faced” by Pakistan. Lauding the SIFC, which had been formed in 2023 and had nine meetings of the apex committee, he highlighted how many important decisions had been taken after the meetings and implemented under the SIFC. Blaming corruption for Pakistan’s economic troubles, he stated that electricity worth PKR 400 billion was stolen annually while circular debt in the electricity and gas sectors was over PKR five trillion. Sharif added: “This year’s target of tax collection is PKR nine trillion, but the potential is over PKR 13 trillion.” He also brought up some achievements of the caretaker government, such as saving PKR 87 billion in its drive against power theft and concluding the privatization process of the Heavy Mechanical Complex in Taxila.

On 20 March, the IMF confirmed that Pakistan was seeking a 24th medium-term bailout package to support structural reforms. In the end-of-mission statement, the IMF said that the staff-level agreement on the successful completion of the existing short-term facility would allow Pakistan to access USD 1.1 billion by April, subject to approval from the fund’s executive board. During the discussions, the Fund claimed to have laid out the broader conditionalities of the next programme on which “discussions are expected to start in the coming months.” Pakistani authorities then “expressed interest in a successor medium-term Fund-supported programme to permanently resolve Pakistan’s fiscal and external sustainability weaknesses, strengthening its economic recovery, and laying the foundations for strong, sustainable, and inclusive growth.” The next medium-term programme would have four key objectives. The first will be strengthening public finances and improving tax administration; the second will be restoring the viability of the energy sector by accelerating cost-reducing reforms and anti-theft efforts; the third will be returning inflation to the target with a transparent and flexible foreign exchange market; the fourth will be promoting private-led activity and scaling up investment in human capital.  

On 20 March, the IMF stated that it had reached a staff-level agreement with Pakistan on the final review of a USD three billion bailout, under which Pakistan will receive USD 1.1 billion after approval from the Fund’s Executive Board. In a statement, the IMF claimed that the agreement “recognizes the strong program implementation by the State Bank of Pakistan and the caretaker government in recent months, as well as the new government’s intentions for ongoing policy and reform efforts to move Pakistan from stabilization to a strong and sustainable recovery.” They further expect the “review to be considered by the IMF’s Board in late April.” The IMF mission chief in Pakistan, Nathan Porter, commended Pakistan’s economic and financial situation, which has “improved in the months since the first review, with growth and confidence continuing to recover on the back of prudent policy management and the resumption of inflows from multilateral and bilateral partners.” However, he noted that growth is “expected to be modest this year,” though the new government is “committed to continue policy efforts.” The government is expected to continue efforts “towards broadening the tax base, and continue with the timely implementation of power and gas tariff adjustments to keep average tariffs consistent with cost recovery while protecting the vulnerable through the existing progressive tariff structures, thus avoiding any net circular debt accumulation.” On the other hand, the central bank will remain “committed to maintaining a prudent monetary policy to lower inflation and ensure exchange rate flexibility.” After this, shares on the Pakistan Stock Exchange climbed by 374 points. (Syed Irfan Raza, “Pakistan cannot survive without another IMF package, says PM,” Dawn, 22 March 2024; Khaleeq Kiani, “Islamabad seeking 24th bailout, IMF confirms,” Dawn, 21 March 2024; “IMF, Pakistan reach staff-level agreement on final bailout review,” Dawn, 20 March 2024)