By Staff Reporter
ISLAMABAD: Pakistan is making a final push to revive a stalled $6.7 billion International Monetary Fund (IMF) loan program before it expires at the end of June, with its prime minister seeking a meeting with the IMF chief and its finance minister meeting the U.S. envoy.
The IMF program, which was approved in 2019, has been on hold since November 2022 due to differences between the IMF and Pakistan over how to fill a debt financing gap.
An official at the finance ministry, who declined to be named, said Prime Minister Shehbaz Sharif had requested a meeting with IMF Managing Director Kristalina Georgieva on the sidelines of the Paris Summit on June 22-23.
“This is a last-ditch effort to revive the IMF program,” the official said. “If this meeting does not go well, then the program will likely be scrapped.”
The Paris Summit is being held to discuss global financing for development. The IMF is expected to attend the summit, and it is possible that the meeting between Sharif and Georgieva could take place there.
A staff-level agreement with the IMF to release $1.1 billion tranche has been delayed since November, with more than 100 days gone since the last staff-level mission to Pakistan, the longest such delay since at least 2008.
The program expires at the end of this month while the release of pending bailout funds under the 9th IMF review are crucial for Pakistan to resolve an acute balance of payments crisis.
Reserves at the country’s central bank can just cover a month’s worth of imports.
The country has recently turned towards “friendly countries” such as China, Saudi Arabia and the UAE for external financing guarantees.
Last week, the central bank announced it had received $1 billion from China. Pakistan has also been pushing the US to influence the IMF to approve the bailout package.
On Wednesday, US Ambassador to Pakistan Donald Blome called on Finance Minister Ishaq Dar to discuss bilateral trade and other matters of mutual interest, the Finance Division said in a statement.
Dar shared the government’s economic policies and priorities to address the challenging economic environment and set the economy on the path to stability and growth.
The minister told Ambassador Blome that his government was committed to completing the IMF programme, and had taken budgetary measures to reduce the fiscal deficit and meet its financial obligations.
Esther Perez Ruiz, IMF representative for Pakistan, had earlier said Pakistan needed to satisfy the IMF on three counts, including the budget, before its board would review whether to release the pending tranche.
The statement said Blome expressed confidence in Pakistan’s economic policies and programmes and extended his support to promote bilateral economic, investment and trade relations between the two countries.
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