This article was last updated on April 16, 2022
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International Monetary Fund (IMF) has agreed to offer a USD 5.3 billion bailout package to Pakistan and also consider the request of another USD 2 billion. The additional package will be studied and evaluated by the IMF Executive Board on Sept 4.
While briefing the press in Islamabad, Finance Minister Ishaq Dar and head of IMF staff mission Jeffrey Franks said that Pakistan will aggressively work in certain areas including reduction in fiscal deficit, implementation of an energy plan, and revival of the privatization program and making monetary policy adjustments. The main challenge for the Finance Ministry would be to convince the political leadership at the federal and provincial levels to fully implement the plans.
“The two sides have reached an agreement for a 3-year program of at least USD 5.3bn under an Extended Fund Facility… Resources from the previous loan were not efficiently utilized with the result that sufficient reserves are not available to service them. We are paying others’ borrowings… You have to appreciate that your net loan is not going up. We are not adding to loan, but taking loans to reduce debt stock,” Mr Dar said.
He also explained that Pakistani authorities have taken the IMF management on board and presented a strong case to increase the present level of access of 348 per cent of quota ($5.3bn) to 500pc of quota ($7.3bn).
“This agreement will be reviewed by the IMF management and finalized before going to the executive board, which will consider the proposed agreement in early September, subject to the timely completion of prior actions to be taken by the authorities,” said Mr Franks.
Mr Franks underlined the focus of the program stating that economic growth should be of top priority and the government will have to take some difficult decisions in order to stabilize the economy.
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