Pakistan PM meets IMF director in a last-ditch effort to get bailout

Islamabad: Pakistan Prime Minister Shehbaz Sharif met IMF Managing Director Kristalina Georgieva on Thursday as the cash-strapped country made a last-ditch effort to get a much-needed loan from the global lender, a media report said.

The two sides exchanged views on the ongoing programmes and cooperation between crisis-ridden Pakistan and the International Monetary Fund (IMF) in the meeting held on the sidelines of the Summit for a New Global Financial Pact at Paris in France, Radio Pakistan reported.

The IMF signed a deal in 2019 to provide USD 6 billion to Pakistan on fulfilment of certain conditions.

The plan was derailed several times and the full reimbursement is still pending due to insistence by the donor that Pakistan should complete all formalities.

Recalling their recent telephone conversation on May 27, 2023, the prime minister apprised Georgieva of Pakistan’s economic outlook and outlined the steps taken by the government for economic growth and stability.

Shehbaz also underscored that all prior actions for the ninth review under the Extended Fund Facility (EEF) had been completed and the government of Pakistan was fully committed to fulfilling its obligations as agreed with the IMF.

The prime minister expressed the hope that the funds allocated under the IMF’s EFF would be released as soon as possible.

“This would help strengthen Pakistan’s ongoing efforts towards economic stabilisation and bring relief to its people,” the premier said.

The IMF managing director shared her institution’s perspective on the ongoing review process. The meeting provided a useful opportunity to take stock of the progress in that context.

Minister for Climate Change Sherry Rehman, Minister for Economic Affairs Ayaz Sadiq, Minister for Information Marriyum Aurangzeb and other officials also attended the meeting.

With reserves at critical levels for the past several months, Pakistan was expected to get around USD 1.2 billion from the IMF in October last year as part of the EFF’s ninth review. But almost eight months later, that tranche has not materialised as the Fund says Pakistan has been unable to meet important prerequisites.

Pakistan’s efforts to unlock access to the already agreed USD 6 billion loan package are in a quagmire as the budget needs to satisfy the global lender to secure the release of more bailout money for the cash-strapped country.

Just days away from its expiry, the programme’s ninth review is still in the doldrums, while the tenth review, which was originally part of the plan, is all but out of the question, according to the report.

It is feared that Pakistan might default on external financing commitments without the active support of the fund.

Pakistan’s economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet.