Pakistan and IMF Make Progress in Talks for Economic Bailout Deal
By Pakistan and the International Monetary Fund (IMF) continued policy talks on Tuesday, in an effort to reach a bailout deal that would provide the South Asian country with critical funds to stabilise its dwindling economy.[0] The IMF has asked Islamabad to bring foreign exchange reserves up to $16.20 billion by June 30.[1]
In a statement issued by the Finance Ministry, the talks focused on fiscal table, financing, etc., and there was a “broad consensus on the reform actions and measures”.[2] The IMF Mission Chief, Nathan Porter, also called on the finance minister and briefed him on the talks. It was added that the mission was working on putting it all together and would finalise the Memorandum of Economic and Financial Policies (MEFP).[3]
The negotiations with the IMF were completed and the MEFP document was handed over to Pakistan, according to Hamed Sheikh. He also said that the international creditor has informed the Pakistani authorities of striking a staff-level pact in the coming days, and an agreement for releasing the loan will be signed soon.[4]
However, Minister of State for Finance and Revenue Aisha Ghaus Pasha said: “We are very close to the finalisation.”[5] The IMF will give Pakistan the MEFP once all matters have been resolved, she declared.
In a statement, Porter said “considerable progress” was made during the talks on “policy measures to address domestic and external imbalances”.[6] He added that “virtual discussions” will continue between the two sides in the coming days to finalise the “implementation details” of the policies.[7]
Prime Minister Shahbaz Sharif also had a virtual session with the IMF mission chief.[8] He assured the international financial body of fulfilling the targets given to the country.[9] The IMF expressed its unease over the projections made by the Ministry of Finance over external financing inflows, which could put the World Bank programme loans and AIIB co-financing in danger.[4] The government may need to negotiate fresh terms and conditions for obtaining commercial loans, keeping in view worsened credit ratings and increased default risks.[3] If the required amount of external financing is not obtained, the nation's foreign exchange reserves will not reach the desired level.[3]
0. “Pakistan-IMF Loan Talks to Continue as Deal Proves Elusive” Bloomberg, 10 Feb. 2023, https://www.bloomberg.com/news/articles/2023-02-10/imf-says-pakistan-bailout-talks-to-continue-to-finalize-pact
1. “IMF wants Islamabad to immediately remove restrictions on imports” SAMAA English, 9 Feb. 2023, https://www.samaaenglish.tv/news/40027063
2. “No breakthrough in IMF talks” The Express Tribune, 9 Feb. 2023, https://tribune.com.pk/story/2400194/no-breakthrough-in-imf-talks
3. “Differences with IMF on external needs, power losses persist” The News International, 9 Feb. 2023, https://www.thenews.com.pk/print/1038799-differences-with-imf-on-external-needs-power-losses-persist
4. “Deadlock Continues as Pakistan, IMF Fail to Reach Staff-Level Pact on Bailout Package” Zee News, 10 Feb. 2023, https://zeenews.india.com/world/deadlock-continues-as-pakistan-imf-fail-to-reach-staff-level-pact-on-bailout-package-2571589.html
5. “Cash-Strapped Pakistan's Talks With IMF Over Bailout Package Hit A Snag: Report” Swarajya, 9 Feb. 2023, https://swarajyamag.com/world/cash-strapped-pakistans-talks-with-imf-over-bailout-package-hit-a-snag-report
6. “Pakistan says it agrees to IMF terms on release of $1.1bn payout” Al Jazeera English, 10 Feb. 2023, https://www.aljazeera.com/news/2023/2/10/pakistan-says-it-agrees-to-imf-terms-on-release-of-1-1bn-payout
7. “IMF mission leaves Pakistan without completing EFF review | EconomyNext” EconomyNext, 10 Feb. 2023, https://economynext.com/imf-mission-leaves-pakistan-without-completing-eff-review-111990/
8. “Virtual discussions will continue to finalise implementation of policy measures: IMF” Geo News, 10 Feb. 2023, https://www.geo.tv/latest/470074-imf-issues-statement-on-pakistan-loan-talks
9. “Pakistan gets new lease of economic life after deal with IMF” The Nation, 9 Feb. 2023, https://www.nation.com.pk/09-Feb-2023/pakistan-gets-new-lease-of-economic-life-after-deal-with-imf
