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Pakistan FM ‘absolutely committed’ to close IMF agreement in ‘next few day’
My team and I have decided that, in a short period of time, we will implement and we will discharge all the sovereign commitments, Pak FM said
Pakistan expects to reach an agreement with the International Monetary Fund to resume its $6.5 billion loan program in the next few days, Finance Minister Ishaq Dar said on Thursday. Dar vowed that the government was “absolutely committed” to completing the bailout programme with the IMF.
It is to note here, the south Asian nation failed to meet multiple such deadlines in the past. The newspaper Dawn pointed out, the Pakistan government is in a race against time to implement measures to reach an agreement with the IMF as the country has reserves barely enough for three weeks of essential imports, while hotly contested elections are due by November.
Economy was in shambles when…: Dar said
“My team and I have decided that, in a short period of time, we will implement and we will discharge all the sovereign commitments that the previous government had made,” Dar said, while addressing a seminar.
He recalled that the coalition government was handed over an economy “in a shambles”.
“To top it [off], the previous government (led by Imran Khan) had agreed to a loan facility which was extended by the IMF. But instead of honouring the commitments, they reversed some conditionalities before leaving office. This led to a serious trust deficit [between the lender and Pakistan],” he highlighted.
Will honour the commitments because…: Dar
However, the government realised that these obligations were not made by an individual but by the sovereign state of Pakistan and hence, the current government will honour it. “We have been in the process of the 9th review which has taken longer than it should have […] we seem to be very close to signing the staff-level agreement, hopefully in the next two days,” Dar added.
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.
Pakistan is relying on funds from a multilateral lender to revive its $350 billion economy and avoid a loan default. To secure the lender's support, Pakistan has taken measures such as raising taxes, energy prices, and interest rates to 20%.
However, concerns have arisen among investors due to Pakistan's ability to fulfill payment obligations amid a dollar crunch. The country needs to repay about $3 billion in dues by June, while $4 billion is expected to be rolled over. Moody's has downgraded Pakistan, citing a fragile external position.
(With inputs against agencies)
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First Published:9 Mar 2023, 06:13 PM IST
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