Friendly delay ‘last hurdle’ to IMF bailout
- Finance Minister Ishaq Dar says several countries had made commitments to support Pakistan during previous International Monetary Fund reviews
ISLAMABAD: Finance Minister Ishaq Dar said on Thursday that an assurance from “friendly countries” to fund a balance of payment gap was the last hurdle in securing an IMF deal, which will offer a critical lifeline to avert an economic meltdown.
Several countries had made commitments to support Pakistan during previous International Monetary Fund (IMF) reviews, Dar told the country’s upper house of parliament, adding that the IMF was now asking for those commitments.
“At the time of the previous reviews, several friendly countries had made commitments to bilaterally support Pakistan, what IMF is now asking (is) that they should actually complete and materialize those commitments,” he said, adding: That’s the only delay.”
Pakistan has to give assurances on financing BOP deficit: IMF
Pakistan is awaiting a bailout package of $1.1 billion from the IMF, that has been delayed since November over issues related to fiscal policy adjustments.
The funds are part of a $6.5 billion bailout package the IMF approved in 2019, which analysts say is critical for Pakistan to avert defaulting on external payment obligations.
The deal will also unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves, which have fallen to four weeks worth of import cover.
The IMF wants Pakistan to get the assurance for up to $7 billion to fund this fiscal year’s balance of payments gap. Dar has been saying it should be around $5 billion.
Islamabad has been hosting the IMF mission since early February to negotiate a series of policy measures for the cash-strapped economy to manage the fiscal deficit ahead of the annual budget around June.
“It has been extensive engagement, unusual, too lengthy, too long, too demanding, but we have completed everything,” Dar said.
Prime Minister Shehbaz Sharif said that all of the IMF’s conditions had been met.
“We’ve completed bitter, very bitter conditions of the IMF,” he told the upper house of the parliament, adding that he hoped to “have a staff level agreement soon.”