Pakistan Expects IMF Decision on Bailout Program within Days, PM Shehbaz Sharif Says
Prime Minister Shehbaz Sharif stated on Tuesday that Pakistan anticipates a resolution on the International Monetary Fund’s (IMF) stalled bailout program within a day or two, as the country continues to meet the demands set by the lender. This optimistic outlook was shared by the prime minister following his fourth conversation with IMF Managing Director Kristalina Georgieva in the span of six days.
Concerns have been raised by rating agencies and economists regarding Pakistan’s $350 billion economy, as the country may face a default on its foreign debt obligations if it fails to secure the $1.1 loan tranche of the Extended Fund Facility (EFF).
The prime minister engaged in a phone call with the IMF chief today, following three meetings held from Thursday to Saturday on the sidelines of the New Global Financial Pact summit in Paris, France. The PM’s Office released a statement outlining the discussion between the IMF chief and the prime minister, focusing on matters related to the stalled bailout program.
During the call, the IMF chief acknowledged the efforts of Finance Minister Ishaq Dar and his team in attempting to revive the loan, following the policy discussions held in Paris. Prime Minister Shehbaz expressed hope that coordination on the bailout program’s key points would lead to a decision from the Washington-based lender in the coming days.
In addition, the statement emphasized the prime minister’s determination to achieve the goals of improving the economic situation through collaborative efforts. The IMF chief also appreciated the prime minister’s resolve while expressing optimism for the improvement of Pakistan’s economic situation.
Despite grappling with a severe economic crisis characterized by high inflation and interest rates, Pakistan has witnessed a positive shift in the prospects for its IMF loan before the impending expiration at the end of the week. In a final effort to meet the lender’s requirements, the nation agreed to a $750 million tax increase and implemented spending cuts in its annual budget over the weekend.
Key Points
- Prime Minister Shehbaz Sharif anticipates a decision from the IMF on Pakistan’s stalled bailout program within a day or two, as the country complies with the lender’s demands.
- Pakistan’s $350 billion economy faces the risk of defaulting on its foreign debt obligations if it fails to secure the $1.1 loan tranche of the IMF’s Extended Fund Facility.
- Despite its economic crisis, Pakistan has demonstrated efforts to improve its situation by engaging in dialogue with the IMF, with Finance Minister Ishaq Dar leading the revival attempts. The nation has agreed to raise taxes by $750 million and implement spending cuts to appease the lender.
Published in PakWeb, June 27, 2023.
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