On Tuesday, Prime Minister Shehbaz Sharif of Pakistan held a teleconference with the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva. The premier expressed his anticipation for a decision concerning the next funding tranche’s disbursement within the next couple of days.
Pakistan’s agreement with the IMF under the Extended Fund Facility (EFF) of 2019 is set to lapse on June 30. However, the ninth review to sanction releasing a $1.2 billion tranche is still in the pipeline.
In their telephonic conversation, Georgieva confirmed the IMF’s interest in seeing Pakistan’s economy flourish. She appreciated the actions of Finance Minister Ishaq Dar and his team in progressing the IMF programme, as per discussions held during the PM’s recent meeting in Paris, according to an official statement from the Prime Minister’s Office (PMO).
The IMF tranche, initially slated for release in October of the preceding year, has been in limbo for the past eight months due to Pakistan’s unfulfilled crucial prerequisites, according to the Fund.
With the programme deadline looming, the Pakistan Muslim League-Nawaz administration has heightened efforts to secure the bailout package’s release. Numerous meetings were conducted in Paris last week during the New Global Financial Pact summit. The most significant outcome was the recommencement of negotiations between Islamabad officials and the IMF to reconcile differences.
Sources state that the IMF managing director did not immediately acquiesce to PM Sharif’s request for a board meeting to approve the 9th review and release the penultimate loan tranche of $1.2 billion.
Read: Pakistan Anticipates IMF Approval After Major Budget Revisions
Nonetheless, after adjusting the budget to meet the Fund’s requirements, the PML-N government retains a renewed optimism for loan procurement and the receipt of a Memorandum for Economic and Financial Policy (MEFP).
Insiders indicate that following the MEFP’s approval, a staff-level agreement is likely, and an IMF board meeting should occur soon, with the IMF’s feedback on the revised budget expected imminently.
Moreover, they mentioned that Pakistan has asked the IMF for leniency on the $6.5 billion external financing condition. The government has proposed to impose additional taxes as a concession for this relaxation.
