Pakistan is at a “critical juncture” and requires “decisive actions” to stabilise its economy, said Jihad Azour, Director of Middle East and Central Asia Department at the International Monetary Fund (IMF).

Responding to a query pertaining to resumption of Pakistan’s IMF bailout program, critical for the South Asian country, Azour said in a press briefing that controlling high inflation and maintaining monetary stability is crucial.

“Recently, the policies that were adopted go in the right direction, and it is important to, in the current juncture, to, on the one hand, to maintain monetary stability by addressing the issue of high inflation that has exceeded 34%, and also maintaining the flexible exchange rate in order to protect the Pakistani economy from external shocks,” said Azour.

IMF official has expressed confidence SLA will be signed soon, says Pakistan’s Finance Division

The IMF representative said that the discussions between the authorities and the IMF are ongoing.

“We needed measure that Pakistan needs and are part of the review are met, as well as also with working together in order to have Pakistan ensure the financing needs that will be very important for Pakistan and to complete the upcoming issue,” he said.

Islamabad’s talks with the IMF for a delayed $1.1 billion loan tranche, a part of the bailout agreed in 2019, have dragged on and foreign exchange reserves have fallen to less than four weeks of imports.

Meanwhile, Azour stressed that Pakistan needs to address its imbalances i.e. double-digit inflation, trade constraints, and maintain a macroeconomic stability

“The priority for us is how to help Pakistan and the Pakistani economy to weather a period of tension economically, with the uncertainties and also a political agenda that is very active, and this is our priority number one, and this is in the context of program that we have already agreed with the authorities on,” said Azour.

SBP chief says inflation to begin decelerating over next few months

On meeting the financing needs, Azour said that the IMF is working with Pakistani authorities and the bilateral supporters of Pakistan, “to ensure that the financing needs for the program and beyond are assured”.

Pakistan announced financial support Friday from the United Arab Emirates and China totalling $1.3 billion.

Meanwhile on Saturday, it was reported that Saudi Arabia will deposit $2 billion into the State Bank of Pakistan’s account “within the next seven working days”.