IMF asks Pakistan to arrange USD 8 billion for successful bailout review

Business Monday 15/May/2023 08:46 AM
IMF asks Pakistan to arrange USD 8 billion for successful bailout review

Islamabad : The International Monetary Fund (IMF) on Saturday asked Pakistan to arrange USD 8 billion in fresh loans to back the external debt repayments during the next seven months for the successful completion of the long-stalled ninth review bailout package, reported The Express Tribune.

IMF's demand comes despite receiving confirmation from Saudi Arabia and the United Arab Emirates (UAE) further eroding chances for the revival of the USD 6.5 billion bailout package. A staff-level accord to release a USD 1.1 billion tranche out of a USD 6.5 billion IMF package has been delayed since November, nearly 100 days since the last staff-level mission to Pakistan.

The IMF's demand to seek its approval on the upcoming budget for the fiscal year 2023-24 has also not been met yet, further minimising the prospects of early completion of the pending 9th review of the Extended Fund Facility (EFF), according to the government sources, reported The Express Tribune.

Sources say that the IMF has raised the demand for additional financing from an earlier unmet condition of USD 6 billion to USD 8 billion to ensure debt repayments coming up for May-December 2023.

The lender has worked out the USD 8 billion needs by considering all projected inflows and outflows for this period, reported The Express Tribune.

Meanwhile, on Thursday Finance Minister Ishaq Dar said that Pakistan will not make tough decisions on the demand of the International Monetary Fund (IMF) anymore.

While informally talking to the journalists, Ishaq Dar said that it is completely up to the International Monetary Fund (IMF) to sign a staff-level agreement or not.

He clarified that the government will not make tough decisions on IMF's demand anymore. "We have already implemented pre-conditions of the IMF but not anymore."

Sources have said that the IMF's focus is now more on ensuring that Pakistan does not default by arranging funds to the extent of external debt repayments. It is no longer emphasising increasing the extremely low foreign exchange reserves, reported The Express Tribune.

In a scheduled press conference on Thursday, IMF spokesperson Julie Kozack said Pakistan needed "significant additional financing" to successfully complete the ninth review. She said the economy was facing stagflation, had very large financing needs and had also been affected by a series of shocks, including severe flooding.