IMF asks Pakistan to arrange USD 8 billion - here’s why
Pakistan economic crisis: The demand comes despite receiving confirmation from Saudi Arabia and the United Arab Emirates (UAE) further eroding chances for the revival of the USD 6.5 billion bailout package.
The International Monetary Fund (IMF) on Saturday asked Pakistan to arrange USD 8 billion in fresh loans to back the external debt repayments during the next seven months for the successful completion of the long-stalled ninth review bailout package, according to a report published by The Express Tribune.
The demand comes despite receiving confirmation from Saudi Arabia and the United Arab Emirates (UAE) further eroding chances for the revival of the USD 6.5 billion bailout package.
A staff-level accord to release a USD 1.1 billion tranche out of a USD 6.5 billion IMF package has been delayed since November, nearly 100 days since the last staff-level mission to Pakistan.
Sources, as quoted by The Express Tribune, said that the Washington-based financial body has raised the demand for additional financing from an earlier unmet condition of USD 6 billion to USD 8 billion to ensure debt repayments coming up for May-December 2023.
The lender has worked out the USD 8 billion needs by considering all projected inflows and outflows for this period, reported The Express Tribune.
Meanwhile, Finance Minister Ishaq Dar on Thursday said that Pakistan will not make tough decisions on the IMF demand. He added that it is completely up to the International Monetary Fund (IMF) to sign a staff-level agreement or not.
He clarified that the government will not make tough decisions on IMF's demand anymore. "We have already implemented pre-conditions of the IMF but not anymore."
Sources have said that the IMF's focus is now more on ensuring that crisis-hit Pakistan does not default by arranging funds to the extent of external debt repayments. It is no longer emphasizing increasing the extremely low foreign exchange reserves, the report stated.
IMF spokesperson Julie Kozack, in a press conference on Thursday, said Pakistan needed "significant additional financing" to successfully complete the ninth review.
She said the economy was facing stagflation, had very large financing needs, and had also been affected by a series of shocks, including severe flooding.
(With ANI inputs)
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First Published:14 May 2023, 09:38 AM IST
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