Islamabad: Pakistan’s Finance Minister Ishaq Dar on Saturday assured a jittery nation that the much-delayed ninth review of the USD 7 billion IMF programme was well on track, a day after he cancelled his visit to Washington for the spring meetings of the IMF and World Bank. Cash-strapped Pakistan and the IMF have failed to reach a staff-level agreement on the much-needed USD 1.1 billion bailout package aimed at preventing the country from going bankrupt.
The funds are part of a USD 6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations. The only hitch for the IMF deal to go through was the confirmation of a USD 1 billion commitment from a friendly country, Dar said in his address to the nation.
“In the past two weeks, one of our friendly countries has again given them (the IMF) the confirmation [of its commitment to help Pakistan] with USD 2 billion. We are now only awaiting the confirmation of a USD 1 billion commitment from one friendly country. After that, all their requirements to conclude the staff-level agreement will be complete. Following that, it takes two more weeks to take the matter into the board meeting,” Dar said.
Though Dar did not name the countries, local media reports said Saudi Arabia had given the commitment to the IMF on helping Pakistan. Dar was expected to attend the spring meetings of the World Bank and IMF that are scheduled from April 10 to 16 in Washington.
He clarified that he had postponed his visit to the US due to the political situation in the country. The finance minister acknowledged that there was a new development with the IMF deal over the past few weeks due to the “cross-subsidy” in the works regarding fuel prices.
“When I went to the IMF with my delegation in October 2022, I invited them to Pakistan for the ninth review, which is technically the September 2022 review,” he said. Dar acknowledged that the nine-day review was “the most difficult negotiations” and it was concluded, which led to the government taking prior actions demanded by the IMF, including the imposition of new taxes worth Rs 170 billion.
In February this year, IMF officials and the Pakistan government held discussions, which remained inconclusive. Pakistan, currently in the throes of a major economic crisis, is grappling with high external debt, a weak local currency, and dwindling foreign exchange reserves enough to shore up for barely one month’s imports.
The consumer price inflation in Pakistan jumped to a record 35.37 per cent in March this year, as food, beverage, and transport prices surged to an astonishing 50 per cent year-on-year. At least 22 people have been killed in stampedes at government-sponsored food distribution outlets across the country.
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