Pakistan to approach IMF for new programme


Sources said that the economic team has begun working on the agreement “which is expected to be tougher” than the existing programme agreed in 2019…reports Asian Lite News

Pakistan has decided to negotiate a new programme with the International Monetary Fund (IMF) immediately after the budget as the coalition government is planning to conclude the $6.5 billion Extended Fund Facility (EFF) without completing all the pending review.

The coalition government has been negotiating with the Washington-based lender to revive its bailout programme since November, with the financing gap among the biggest roadblocks. There’s about $2.5 billion left to disburse from the $6.5 billion programme that’s scheduled to expire on June 30, Geo News reported.

The sources said that while negotiations on the ninth review were almost complete, a staff-level agreement is yet to be reached. Even after this review completes, the 10th and 11th reviews will remain pending.

“Completion of both reviews before June 30 seems impossible and the government has decided against seeking an extension,” the sources said, adding that Ishaq Dar-led Ministry of Finance will approach the Fund for a new programme after budget – which is expected to be tabled on June 9, Geo News reported.

The sources further revealed that if the coalition government fails to complete the negotiations before its term ends in August, the caretaker government will hold talks with the Washington-based lender.

Disclosing some of the details of the new programme, the sources said that the economic team has begun working on the agreement “which is expected to be tougher” than the existing programme agreed in 2019 by the Pakistan Tehreek-e-Insaf (PTI) government, Geo News reported.

Moreover, they said that the new bailout programme will likely be for more than three years. “Pakistan will desperately need an IMF programme in September as the country needs to pay around $9-11 billion dollars in repayments of external debt by December 2023,” they added.

Meanwhile, Pakistan State Minister for Finance and Revenue Aisha Ghaus Pasha slammed the International Monetary Fund (IMF) for “intervening” in Pakistan’s internal matters, local media reported.

“Pakistan’s conduct is in line with the law,” the state minister said, terming IMF Mission Chief for Pakistan Nathan Porter’s statement – regarding the political situation in Pakistan – “extraordinary”.

While the IMF does not comment on domestic politics, Porter had said that the Fund hopes “a peaceful way forward is found in line with the Constitution and the rule of law”.

Hoping that both sides will reach a staff-level agreement before the announcement of the federal budget – expected to be unveiled on June 9 – for the fiscal year 2023-24, the state minister said that the delay is neither good for Pakistan nor the Fund.

Dr Pasha confirmed reports that Prime Minister Shehbaz Sharif contacted IMF Managing Director Kristalina Georgieva, adding that the premier assured the fund’s chief that Pakistan will meet all its obligations, Geo News reported.

On May 27, the Prime Minister contacted Georgieva, requesting her to help Pakistan revive the stalled $6.5 billion facility.

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