Pakistan might require another IMF programme to meet the long-term external financing requirements, said Moody’s, world’s top financial research and rating agency.

It noted that the approval of the Stand-by Arrangement (SBA) would moderately improve the government liquidity, support macroeconomic stability and open up support from other bilateral and multilateral partners, said an expert associated with the Moody’s Investor Services.

According to Grace Lim, Pakistan needs a long-term external financing plan to meet its large financing needs as well as introduction of reforms, including enhancing revenue collection.

Listing the challenges, she said high interest rates and inflation constrain government spending as well as business investment.

The external debt repayment was expected to remain high during 2023-24 amid the uncertainty whether would be able to secure the full amount of $3 billion deal, Lim added.

“Revenue-raising measures will be tested as the country goes into elections due in October 2023,” she said and added that the decision to join another programme, therefore, might only become clear after the polls.

The negotiations for any future programme were expected to take time, even if successful, she said. “Until a new programme is agreed upon, Pakistan's ability to secure loans on an ongoing basis over the long term will be severely constrained.”