As Pakistan grapples with the delayed release of bailout funds, Prime Minister Shehbaz Sharif remains actively engaged with the IMF, striving to find a resolution and secure the much-needed funds to alleviate the country’s economic challenges.
Prime Minister Shehbaz Sharif made 4th contact with International Monetary Fund (IMF) Managing Director Kristalina Georgieva in just six days.
Pakistan’s ongoing Extended Fund Facility (EFF), initiated in 2019, is currently awaiting the release of a $1.2 billion tranche as part of its ninth review. However, with less than 10 days remaining until the program’s expiry on June 30, the tranche has yet to be disbursed.
The IMF has cited Pakistan’s inability to meet critical prerequisites as the reason for the delay.
To address this pressing issue, Prime Minister Shehbaz Sharif held back-to-back meetings with IMF MD Georgieva in Paris last week.
This recent conversation marks the fourth contact between the two leaders within a span of just six days. The Prime Minister’s Office released a statement acknowledging the discussions and expressing hope that the IMF would make a decision regarding the release of the bailout funds within the next day or two.
Efforts to salvage the program intensified after the IMF raised concerns about Pakistan’s budget for the upcoming fiscal year 2024, stating that certain proposed measures did not align with the conditionality of the EFF program.
In response, the government made several amendments to the budget, including fiscal tightening measures dictated by the IMF. These changes were aimed at satisfying the lender’s requirements and securing critical funding.
The revised budget, including measures such as additional tax measures amounting to Rs215 billion, a spending cut of Rs85 billion, the withdrawal of a foreign exchange inflow amnesty, the lifting of import restrictions, a Rs16 billion increase in Benazir Income Support Programme allocations and others, was approved by the Parliament and signed by Acting President Sadiq Sanjrani.
An official source revealed that most of the disagreements between the IMF staff and the Ministry of Finance were addressed just hours before the finance minister’s concluding speech on Saturday. However, the specific dates for the IMF’s executive board approval and the disbursement of funds are yet to be determined.
