ISLAMABAD: Pakistan has to accept unwillingly the strict conditions of a deal with the IMF, PM Shehbaz Sharif said on Friday, to provide a lifeline for an economy in turmoil. He was speaking to security officials in Islamabad in a meeting that was telecast live. He said that an accord was still a “week, 10 days” away.
Pakistani authorities have been negotiating with the IMF since February over policy framework issues and are hoping to sign a staff-level agreement that will pave the way for more inflows from other bilateral and multilateral lenders. Once the deal is signed, the lender will disburse an over $1 billion tranche from the $6.5 billion bailout agreed in 2019.
Pakistan has already taken a string of measures, which included adopting a market-based exchange rate; a hike in fuel and power tariffs; the withdrawal of subsidies, and more taxation to generate revenue to bridge the fiscal deficit. Officials say IMF is still negotiating with Islamabad over power sector debt, as well as a potential rise in the policy rate, which stands at 17%. The strict measures are likely to further cool the economy and stoke inflation, which stood at 27.5% in January. The economy has been in turmoil, and needs external financing with its foreign exchange reserves dipping to $3 billion, barely enough for three weeks’ worth of imports.
Pakistani authorities have been negotiating with the IMF since February over policy framework issues and are hoping to sign a staff-level agreement that will pave the way for more inflows from other bilateral and multilateral lenders. Once the deal is signed, the lender will disburse an over $1 billion tranche from the $6.5 billion bailout agreed in 2019.
Pakistan has already taken a string of measures, which included adopting a market-based exchange rate; a hike in fuel and power tariffs; the withdrawal of subsidies, and more taxation to generate revenue to bridge the fiscal deficit. Officials say IMF is still negotiating with Islamabad over power sector debt, as well as a potential rise in the policy rate, which stands at 17%. The strict measures are likely to further cool the economy and stoke inflation, which stood at 27.5% in January. The economy has been in turmoil, and needs external financing with its foreign exchange reserves dipping to $3 billion, barely enough for three weeks’ worth of imports.