Pakistan PM Shehbaz Sharif asks IMF chief for early release of stalled bailout fund

Islamabad: Pakistan Prime Minister Shehbaz Sharif held a phone call with IMF Managing Director Kristalina Georgieva on Tuesday during which he expressed hope that the global lender would announce a decision on the release of the bailout fund within a day or two.

Pakistan’s ninth review by the International Monetary Fund under the 2019 Extended Fund Facility (EFF) for the release of a USD 1.2 billion tranche is still pending with fewer than 10 days remaining until the programme’s expiry on June 30.

Sharif discussed the IMF programme with Georgieva and expressed hope that coordination on the points of the bailout program would lead to a decision from the global lender in a day or two, a statement by the PM Office said.

Pakistan signed a USD 6.5 billion package with the Washington-based IMF in 2019.

The plan was derailed several times and the full reimbursement is still pending due to insistence by the donor that Pakistan should complete all formalities.

“The prime minister also reiterated his determination to achieve the goals of improving the economic situation through joint efforts,” the statement said.

Pakistan's government is making every effort to get a tranche of USD 1.2 billion which was originally due to be paid in October last year but was delayed due to conditions by the IMF.

The statement also quoted Georgieva as saying that the Fund wanted Pakistan’s economic situation to improve and appreciated the commitment of the premier.

“In connection with the meetings held in Paris, the IMF director general acknowledged efforts by the finance minister and his team for completion of the program,” it said.

During the meeting in Paris, on the sidelines of the Global Financing Summit which took place last week on June 23, Georgieva had urged Shehbaz Sharif to resolve policy differences at the global lender's staff level prior to getting a much-needed loan to stabilise the cash-strapped country's economy.

Pakistan in its last-ditch effort to fulfill conditions by the IMF, imposed new taxes of Rs 215 billion in the budget passed by the parliament on Sunday, while pledging to cut down its expenses by Rs 85 billion.

The changes in the budget were made after three days of marathon talks with the IMF experts.

Pakistan urgently needs the IMF loan which will open avenues for more funding by various multilateral and bilateral donors to support its meagre foreign reserves of around USD 4 billion.

It is feared that Pakistan might default on external financing commitments without the active support of the IMF.

Pakistan’s economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet.