Home/ News / World/  Apprehensions of Pakistan defaulting on debts 'over now', says PM Sharif

Apprehensions of a default by Pakistan on debt obligations are "over now", the country's Prime Minister Shehbaz Sharif said on Wednesday, adding that a staff-level agreement with the International Monetary Fund (IMF) "will be done soon".

The cash-strapped South Asian nation is expecting to unlock a $1.1 billion bailout package from the IMF, which will be critical in helping it avoid defaulting on external debt obligations.

PM Sharif has said that the staff-level agreement with the IMF will be reached "within a few days" as the cash-strapped government has accepted even the “toughest conditions" of the global lender for reviving the stalled USS 1.1 billion loan tranche.

Sharif said that joint efforts were being made by both his economic team and other national institutions to make the process a success.

"The IMF's toughest conditions have been met and we will sign the staff-level agreement within a few days," Sharif said in an interview with Geo News on Tuesday.

Finance Minister Ishaq Dar has repeatedly made similar statements.

Pakistan's economy is in dire straits. The country is awaiting a much-needed USD 1.1 billion tranche of funding from the Washington-based International Monetary Fund (IMF).

The funds are part of a USD 6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.

He also said that he sees "more burden" coming on the already inflation-hit public as Pakistan scrambles to secure the IMF's conditions for reviving the stalled loan tranche.

The prime minister spoke at length on multiple national issues, including the one-year performance of his government, the economic situation, elections, the Toshakhana record, and party matters.

He said at the time of assuming government, he did not know that his predecessor Pakistan Tehreek-e-Insaf's chief Imran Khan has agreed on such conditions with the IMF which he later backed out of to undermine Pakistan in the world as well as among global institutions.

“This is why the IMF is making us accept those conditionalities and seeking their implementation. No doubt, these conditions have burdened the common man," he admitted.

Pakistan has implemented a series of policy measures including increased taxes, higher energy prices and increasing interest rates to the highest in 25 years to unlock funding from its stalled USD 7 billion loan programme from the IMF.

Pakistan is taking various steps on the Fund's behest for the release of a USD 1.1 billion tranche under the USD 7 billion loan facility, including unveiling a mini-budget for fetching additional tax revenues of Rs170 billion by raising the GST rate from 17 per cent to 18 per cent.

Pakistan and the IMF have been holding virtual talks after the two sides held 10 days of intensive negotiations with an IMF delegation in Islamabad from January 31 to February 9, which failed to reach an agreement.

This story has been published from a wire agency feed without modifications to the text.

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Updated: 15 Mar 2023, 04:38 PM IST
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