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Pakistan

IMF seeks financial assurances before taking 'next step with Pakistan'

  • Says Pakistan's economy faces multiple challenges including from slowing growth, high inflation and large financing needs
Published March 24, 2023

The International Monetary Fund (IMF) has said it needs to ensure financing assurances are in place in order to take “the next step with Pakistan”.

In a press briefing on Friday, Julie Kozack, the IMF’s Director of Strategic Communications, stated: “Timely financial assistance from external partners will be critical to support the authorities’ policy efforts and ensure the successful completion of the review [with Pakistan].

“Ensuring that there is sufficient financing to support the authorities is the paramount priority. A Staff Level Agreement (SLA) will follow once the few remaining points are closed,” she said.

No requirement in Pakistan programme that interferes with polls: IMF

The IMF official said that financing assurances are a standard feature of all IMF program,es.

“We do need to ensure that we have those financing assurances in place in order for us to be able to take the next step with Pakistan,” she added.

On the status of talks with Pakistan, Kozack said discussions are ongoing between IMF staff and the Pakistani authorities toward a SLA on policies to complete the ninth review of Pakistan’s extended Fund Facility (EFF).

“The authorities are committed to implementing the necessary reforms. They’ve started to implement decisive actions to stabilize the economy and restore confidence. While providing space to accommodate the needs related to the floods, including through an increase in social assistance through the Benazir Income Support Program, which is aimed at the most vulnerable,” she said.

Pakistan careening towards potential default if IMF aid does not arrive: Bloomberg

The IMF spokesperson also said that Pakistan’s economy faces multiple challenges including from slowing growth, high inflation and large financing needs. “And of course, this is all coming on the back of devastating floods,” she said.

The statement comes as Pakistan reels from one of its worst economic crises in history. The South Asian country has been faced with a barrage of woes with a perceived default risk and downgrade by international ratings agencies reflecting the state of the economy that has also had to bear major political turmoil and frequent change in key leadership.

‘Pakistan is running out of time,’ warns PBC as IMF programme hangs in balance

Pakistan remains in talks with the international lender for the resumption of the IMF’s Extended Fund Facility (EFF), which has been stalled since last year.

The bailout programme’s revival has been deemed crucial to stabilise the economy that has been hit by a severe dollar shortage in recent months with reserves held by the central bank treading at critically low levels.

On Thursday, the IMF clarified that decisions regarding the constitutionality, feasibility and timing of provincial and general elections “rest solely with Pakistan’s institutions”, it added that there was “no requirement under Pakistan’s Extended Fund Facility-supported programme which could interfere with the country’s ability to undertake constitutional activities”.

Comments

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Pakistani1 Mar 24, 2023 12:50pm
IMF is giving a very clear message. Government continues with their mindless expense spree and opposition continues with the destructive actions to harm the economy. If the locals who are in charge, do not care, why should IMF?
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Tulukan Mairandi Mar 24, 2023 03:51pm
Iron brother China must be pressured relentlessly to give sweeter than honey commitments, against the threat of being a US ally and talking about Taiwan and Ughyur genocide. In fact, the truth is that CPEC is more strategically important to China than it serves Pakistan. That's an amazing trump card.
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Love Your Country Mar 24, 2023 04:47pm
Why are the conditions not stated in public once for all?
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Naeem Bari Salimi Mar 24, 2023 04:56pm
Seeking loans from IMF and friendly countries has been the hall mark of ill governance, without taking appropriate austerity measures or at least having control over extra vengeant and unaccounted expenditures incurred by the successive rulers since 1947! Blame game and pointing out the shortcomings will be futile, untill and unless IMF get proper forensic audit of the earlier loans extended to the previous governments w.e.f 1980! Otherwise any extended loan facility would be of no use to the poor down trodden and suppressed citizens of Pakistan! If this requirement is not pressed upon the IMF, it will be presumed that even IMF is not bothered about the cruelty mated out to the illiterate under nourished and sick dying people of Pakistan by its unscrupeless rulers !!!!
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Tulukan Mairandi Mar 24, 2023 05:13pm
Ishaq Dar will be putting his feet in his mouth for saying such nasty things about IMF in late 2022. Now they are humiliating him.
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bonce richard Mar 24, 2023 05:52pm
@Pakistani1, Everyday IMF wants assurance from friends countries who deposit money in our account. Now question who will trust on corrupted army and criminal politicians of the so-called Islamic republic of Pakistan where only Punjabi dominate the country.
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AmirSh. Mar 24, 2023 06:09pm
Where is our dear, beloved & very capable Financial Czar- Mr. Ishaq Dar???
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Maqbool Mar 24, 2023 08:26pm
Dar agrees to increase interest rates to over 20% , which helps the banks but keep the Behbood rate at 13.92 % so people sell their government certificates and put their money in the banks which then deposite that same money in PIB and Tbills , at huge interest rate and profit . Mr Dar seems to be the Minister for Banking not our Minister for Finance .
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