Pakistan PM Shehbaz Sharif tells finance ministry to follow IMF parameters in budget: Report

Islamabad: Pakistan Prime Minister Shehbaz Sharif has directed the finance ministry to ensure that the budget is in line with the parameters set by the IMF, amid ongoing negotiations with the global lender for a bailout package for the cash-strapped country, according to a media report on Wednesday.

The country's budget is likely to be presented on Friday.

A week back, Sharif held a telephone conversation with International Monetary Fund (IMF) Managing Director Kristalina Georgieva and urged her to revive the USD 6.5 billion deal that was initially signed in 2019 and is set to expire by the end of this month.

Geo News, citing an informed source, said Sharif, during a meeting with Finance Minister Ishaq Dar on Tuesday, expressed optimism that the government would reach an agreement with the IMF.

The source also dismissed speculation that the government would present a populist election-year budget and said, "Pakistan can't afford any budget that violates the set basics of the IMF."

The prime minister was quite optimistic about the revival of the IMF programme after the conversation with Georgieva, the source said. In the same meeting, it was agreed that Pakistan would share details of the budget with the Washington-based bank.

The discussion between Sharif and Georgieva took place after the finance ministry could not break the deadlock over loan talks during the past four months. Officials on either side have accused each other of the holdup with Pakistan struggling to enact necessary reforms and the IMF not showing any leniency.

Sharif on Monday told Turkish media that Pakistan is hopeful of finalising a deal with the IMF this month.

"We are still very hopeful that the IMF programme will materialise. Our ninth review by the IMF will match all terms and conditions and, hopefully, we'll have some good news this month," he told the state-run Anadolu news agency in Ankara, adding that Pakistan had met all conditions.

"Some of those actions are usually met after the board's approval, but this time the IMF required that those actions be met before the board's approval, so we have met them," he added.

Pakistan, currently in the throes of a major political as well as economic crisis, is grappling with high external debt, a weak local currency and dwindling foreign exchange reserves.

The World Bank, its latest Global Economic Prospects report, has projected Pakistan's economy to grow by two per cent in the next fiscal, lower than the 3.5 per cent target set by the country's top economic body, saying the lasting effects of the August 2022 floods, along with policy uncertainty and limited foreign exchange resources have depressed activity in the country.