Finance Minister Ishaq Dar on Wednesday addressed concerns of a financial crisis in the country and reassured the public that Pakistan was not on the verge of default.
He made the statement in backdrop of prolonged delay in reaching an agreement with the International Monetary Fund (IMF) for the release of a $1.1 billion tranche from a $6.5 billion loan package.
Speaking at a gathering at the Federal Board of Revenue in Islamabad, the finance minister praised his economic team for their efforts and hard work.
He highlighted that Pakistan had recorded a current account surplus of $750 million in March and $18 million in April.
Regarding the ongoing negotiations with the IMF, Dar stated that his team had completed all the technical work and prior actions required for the completion of the ninth review.
He expressed sincere efforts on their part to finalize the IMF’s ongoing program and referred to the delay as unfortunate. He acknowledged that the review should have been concluded earlier.
In terms of debt repayment, Dar informed that Pakistan had repaid $5.5 billion of its commercial loans. He specifically mentioned that China had rolled over $2 billion once it understood that Pakistan had fulfilled the necessary requirements for the release of funds by the IMF.
Dar also expressed optimism that a substantial portion of the remaining $3.5 billion from non-Chinese commercial banks would be returned once the staff-level agreement or board meeting with the IMF is finalized, as these banks are always willing to conduct business.
The delay in reaching an accord with the IMF has persisted since November, with over 100 days having passed since the last staff-level mission to Pakistan. This represents the longest gap of its kind since at least 2008.
The IMF recently stated that Pakistan required significant additional financing for a successful completion of the ninth review of the bailout package. This additional financing is crucial to address the acute balance of payments crisis in the country.
To mitigate the funding deficit, Pakistan has received assistance from the United Arab Emirates, Saudi Arabia, and China in the form of pledges made in March and April.
As the situation unfolds, the finance minister’s reassurances aim to alleviate concerns about an impending financial crisis and emphasize the government’s commitment to resolving the ongoing financial challenges through dialogue and international cooperation.
