(Bloomberg) -- Pakistan wants the International Monetary Fund to give it “breathing space” to jump-start an economy battered by last year’s massive floods, a global slowdown and the war in Ukraine.

In a virtual meeting on Tuesday, Finance Minister Ishaq Dar shared the country’s budget plan for the new fiscal year, which begins in July, with Nathan Porter, the IMF’s mission chief for Pakistan.

The IMF has asked Pakistan to present a budget that meets the goals of the stalled, $6.7 billion bailout it extended to the country in 2019. The loan expires at the end of June, and the new budget will help dictate how the IMF moves forward on the program.

The proposed budget from Prime Minister Shehbaz Sharif’s government set a target growth rate of 3.5%, up from an estimated 0.3% in the current fiscal year. It also proposes 1.15 trillion rupees ($4 billion) in development spending. 

“We don’t want to take any such step that drags us away from stabilization,” junior finance minister Aisha Ghaus Pasha told reporters in Islamabad on Wednesday. “While remaining within stabilization mode, we seek a breathing space” to bolster economic growth, she said.

But the budget falls short of some of the fund’s expectations. 

Since last year, Islamabad has hiked energy tariffs and taxes to satisfy the IMF. Pakistan still needs to arrange $2 billion in external funding out of a $6 billion target set by the fund.

Pasha said the government will continue discussions with IMF officials over government spending and revenue collection for the new fiscal year. 

In a statement, IMF resident representative Esther Perez Ruiz said the fund is ready to work with Pakistani authorities to refine the budget ahead of its passage. 

Pakistan expects to secure a tranche of at least $1.1 billion from the IMF loan program after completing a ninth review, that, ultimately, could unlock crucial funding from other lenders.

The country faces about $22 billion of external debt payments for fiscal year 2024 — about five times its reserves, according to Columbia Threadneedle Investments.

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