By Staff Reporter
ISLAMABAD: Minister Shehbaz Sharif said on Friday the International Monetary Fund is giving Pakistan a difficult time in negotiations amid negotiations with the International Monetary Fund as the country battles an unprecedented economic crisis.
Pakistan is facing its worst economic crisis in decades with dollar reserves falling to $3.1 billion, enough for just 18 days of imports.
The low levels have raised a red flag as the country looks for additional multibillion-dollar financial support packages from friendly countries to shore them up. The country is in dire need of funds to cover its current account deficit and debt obligations, for which it needs more than $30 billion in external financing this financial year.
PM Sharif called the IMF’s conditions for unlocking more funds tough and “beyond imagination.”
A team from the lender is visiting Pakistan until Feb. 9 to discuss the revive a stalled $6.5 billion loan program.
“As I’m speaking, the IMF delegation is in Islamabad and definitely giving a tough time to the finance minister and his team,” Sharif said in a speech in Peshawar.
“I will not go into the details but will only say that our economic challenge is unimaginable. The conditions we will have to agree to with the IMF are beyond imagination.”
Pakistan’s ninth review of staff-level talks with the IMF for the release of its next tranche started just two days back after a delay of almost five months on differences on several issues.
The global lender has set strict conditions before resuming the bailout programme , such as asking the government to allow a market-determined exchange rate for the local currency, ease fuel subsidies, and control circular debt in the power sector.
The government has held out against tax rises and subsidy-slashing demanded by the IMF, fearful of a backlash before elections due in October.
The government loosened controls on the rupee to rein in a rampant black market in US dollars, a step that caused the currency to plunge to a record low. Cheap petrol prices have also been raised.
Sharif said the country has no choice but to make compromises.
“But we will have to agree with the conditions… We have to meet them in any condition.”
A biggest jump in food prices pushed the inflation a 48-year high in January in a new blow for households grappling with a cost-of-living crisis.
Pakistanis are experiencing inflation at levels not seen for decades as prices surge for essentials like food, energy, transport, and accommodation.
PM Sharif has called an all-party conference on Feb. 7 to discuss economic and terrorism-related challenges. However, former prime minister Imran Khan will not attend the conference. Sharif’s coalition toppled Khan government in a confidence vote last year.
Khan has been protesting for early elections that are scheduled for sometime after August.
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