Pakistan economic crisisPakistan’s Prime Minister Shehbaz Sharif has said that the International Monetary Fund (IMF) was giving his government a “tough time” during talks to revive the loan as the country is headed for default. The cash-strapped country is demanding an IMF bailout to save the country from economic collapse for the ninth time.
The IMF mission, led by Nathan Porter, on January 31 began talks for the ninth review of the US$7 billion aid package from Pakistan, chaired by Finance Minister Ishaq Dar.
The Prime Minister made the remarks while addressing the Apex Committee meeting in Peshawar. The committee is the apex provincial body to deal with insurgency.
Talking about the security situation, Sharif highlighted the economic challenges faced by the country and said that “the situation is before the whole country”.
“As I speak, the IMF delegation is in Islamabad and they are giving a tough time to Finance Minister Ishaq Dar and his team,” he said.
The economic challenge at this point was unimaginable, with Sharif saying the IMF conditions the country had to meet were “beyond imagination”, but meeting the fund’s demands was imperative.
He did not give details about the talks with the IMF team, which coincided with Pakistan’s reserves falling to a critical level of USD 3.09 billion as of January 27, which is only enough to cover 18 days of imports.
Pakistan’s central bank said on Friday that its foreign exchange reserves declined by 16.1 percent to $3.09 billion at the end of the last fiscal week, the lowest in nearly 10 years.
The IMF will provide over USD 1.1 billion after a successful ninth review and the gesture will open up space for bilateral loans from various friendly countries and multilateral institutions.
Meanwhile, Dawn newspaper quoted sources as saying that the IMF mission chief sought clear action to bridge the challenging financial gap of between Rs 2 and 2.5 trillion.
“You have no other option” was the key message, as members of the mission engaged with the finance and power ministries led by Ishaq Dar and Khurram Dastgir Khan, sources close to the meetings told the newspaper.
The two sides are expected to complete technical-level talks in the first round, which will conclude by the end of the day, followed by policy-level talks which will be completed by February 9.
Pakistan has agreed to raise petroleum prices and allowed a market based exchange rate but it seems too little and too late. The fund seeks more measures to increase revenue.
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