An International Monetary Fund (IMF) mission is slated to visit Pakistan this month for deliberations on a new program, the lender announced on Sunday, coinciding with Islamabad’s commencement of its annual budget formulation process for the upcoming financial year.

Having recently concluded a short-term $3 billion program, which played a crucial role in averting sovereign default, Pakistan is now emphasizing the necessity for a fresh, longer-term arrangement under the leadership of Prime Minister Shehbaz Sharif.

“In May, a mission is anticipated to travel to Pakistan to engage in discussions concerning the FY25 budget, policies, and reforms within the potential new program aimed at the welfare of all Pakistanis,” the IMF stated in an emailed response to Reuters.

Pakistan’s fiscal year spans from July to June, and the budget for fiscal year 2025, the inaugural one under Sharif’s administration, must be presented before June 30.

While the IMF did not specify the exact dates of the visit or the magnitude and duration of the program, it emphasized the importance of expediting reforms over the program’s size.

“Accelerating reforms now is more important than the size of the program, which will be guided by the package of reform and balance of payments needs,” the IMF statement underscored.

Having narrowly averted default last summer, Pakistan’s $350 billion economy has stabilized since the completion of the previous IMF program. Inflation has moderated to approximately 17% in April from a peak of 38% last May.

Nevertheless, Pakistan continues to grapple with a significant fiscal deficit. While it has managed to rein in its external account deficit through import control measures, this has come at the expense of sluggish growth, expected to hover around 2% this year compared to negative growth last year.

In an interview with Reuters, Pakistan Finance Minister Muhammad Aurangzeb expressed hope for reaching an agreement on the framework of a new IMF loan in May.

Pakistan is anticipated to seek at least $6 billion and explore additional financing from the fund under the Resilience and Sustainability Trust.