Muhammad Aurangzeb seeks larger IMF bailout for Pakistan

The Federal Minister for Finance and Revenue, Muhammad Aurangzeb, has expressed the expectation of a larger bailout programme from the International Monetary Fund (IMF) during his visit to Washington. He emphasized the need to improve revenue distribution between the provinces and the Center, suggesting a revisit of the NFC award if the loan is approved.

Aurangzeb highlighted the importance of bringing sectors like provincial markets into the tax net more effectively. Pakistan is currently in discussions with the IMF for a 'larger and longer' multi-billion-dollar loan programme, with specific details yet to be disclosed.

Regarding the potential impact on the National Finance Commission (NFC) award post-IMF approval, Aurangzeb mentioned the necessity to review it in the context of the 18th Amendment, which devolved significant responsibilities to the provinces. He stressed the importance of engaging with provinces to enhance tax bases, particularly in sectors like agriculture, real estate, and property construction.

Pakistan had previously signed a short-term agreement with the IMF in 2023 and is now seeking a new bailout of up to $8 billion as the current $3 billion one nears expiration. The IMF's latest World Economic Outlook projects Pakistan's growth at 2% currently, with a growth rate of 3.5% expected for the next fiscal year.