- PM Shehbaz contacts IMF chairman to revive the bailout plan.
ISLAMABAD: Prime Minister Shehbaz Sharif has reached out to International Monetary Fund (IMF) Managing Director Kristalina Georgieva, appealing for assistance in reviving Pakistan’s stalled $6.5 billion facility. The Prime Minister contacted the IMF chief on May 27, urging her intervention to complete the pending ninth review, which would unlock $1.1 billion in financing for the financially strained nation.
Pakistan is burdened with approximately $22 billion of external debt service for the fiscal year 2024, starting in July, which is roughly five times its reserves, as stated by Columbia Threadneedle Investments. As a result, the coalition government is intensifying its efforts to secure funding as it teeters on the brink of a sovereign default.
Negotiations between the coalition government and the Washington-based lender to revive the bailout program have been ongoing since November, with the financing gap posing one of the main obstacles. Approximately $2.7 billion of the $6.5 billion program, set to expire next month, remains to be disbursed.
Despite the conditions tied to external financing, the prime minister has instructed the Ministry of Finance to prepare the federal budget for the fiscal year 2023-24 in collaboration with the IMF.
It has been reported that the lender aims to bridge the gap between the interbank and open market exchange rates of the Pakistani rupee against the US dollar.
Nathan Porter, IMF mission chief for Pakistan, stated a day earlier, “IMF staff continues the engagement with the Pakistani authorities to pave the way for a board meeting before the current program expires in end-June.” He added that authorities are focused on restoring proper foreign-exchange market functioning, passing the fiscal year 2023-24 budget in line with program objectives, and ensuring adequate financing.
Finance Minister Ishaq Dar, on Sunday, announced that Pakistan would share its budget details with the IMF. He expressed his desire for the IMF to complete the ninth review before the budget presentation in early June, as all the conditions for it had already been met. In an interview with Geo News, he stated, “They have asked for some more things again; we are ready to give that too. They say, ‘give us budget details,’ we will give it to them.”
Regarding future reviews, he emphasized that combining the ninth and tenth reviews of the bailout would not be favorable for Pakistan. He asserted, “We will not do it. We see this as unfair.”
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