The International Monetary Fund (IMF) has forecast a widening of Pakistan’s trade deficit in the next fiscal year as Finance Minister Muhammad Aurangzeb is set to present the budget for 2024-25 next week.
The Washington-based lender says Pakistan’s trade deficit will widen by $4.165 billion as the two sides negotiate another IMF program in Islamabad.
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Although the dialogue failed to reach an agreement at the staff level, HPG said significant progress has been made in reaching an agreement on the Expanded Fund (EFF).
This statement was made after the completion of discussions with the authorities following the arrival of the International Monetary Fund team led by Nathan Porter in Pakistan on May 13.
“The mission and the authorities will continue to hold policy discussions in the coming days with the aim of finalizing the negotiations, including the financial support needed to support HPG reform efforts with Pakistan’s bilateral and multilateral partners,” Porter said.
Pakistan is seeking at least $6 billion in new programs and will require additional funding from the Resilience and Sustainability Trust, which includes climate finance from HPG.
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Ahead of the talks, HPG warned that the risk of losses for Pakistan’s economy was too high.
Turning to the trade deficit, HPG estimates Pakistan’s imports increased by $5.517 billion and exports by $1.352 billion.
As for the overall figures, the International Monetary Fund said Pakistan is likely to have imports of $60.48 billion against exports of $32.76 billion, resulting in a trade deficit of $27.72 billion.
On the other hand, finance ministry sources estimate that Pakistan may witness a trade deficit of $23.76 billion in the last financial year, while the country’s exports will reach $31.20 billion.
