Monday, June 05, 2023
Pakistan and the International Monetary Fund (IMF) are likely to finalise the much-awaited loan deal this month, hoped Prime Minister Shehbaz Sharif.
In an exclusive interview with Turkish news agency Anadolu, the premier said the ninth review by the IMF will match all terms and conditions, adding, “Hopefully, we’ll have some good news this month”.
He added that Pakistan has met each and every requirement of the IMF as prior actions.
On contingency plans in case the IMF talks fall through, the prime minister emphasized the resilience and fortitude of the Pakistani nation.
He said the people of Pakistan have faced challenges in the past, and if needed, will “tighten our belt” and rise again. The PM asserted that his government has been able to navigate the challenges “in the best possible fashion with the help of the people of Pakistan” and “brotherly and friendly countries.”
Talking about the bilateral relations between Pakistan and Turkiye, the premier termed them as “one soul, two hearts that beat together”.
He also congratulated the people of Turkiye on President Erdogan’s re-election, hailing it as a “wonderful development.”
PM Shehbaz said Pakistan and Turkey will boost cooperation in the near future to enhance trade and foster mutual growth by focusing on areas such as biogas, solar energy, and hydropower.
Last week, Minister of State for Finance Dr Aisha Ghaus Pasha ruled out any possibility of contemplating upon any other option — Plan B — in case Pakistan fails to woo the IMF to revive the stalled loan programme, The News reported.
“Let me say with clarity there were no other options that we are contemplating upon under Plan B in case of no revival of the Fund programme as the government was committed to reviving the IMF programme by completing the pending ninth review,” she said.
Dr Pasha also disclosed that the Washington-based lender was still sticking to its projection of a financing gap of $6 billion for the ongoing financial year against Islamabad’s assessment of $4.5 billion on which assurances extended to the IMF by multilateral as well as bilateral creditors.
The ongoing IMF programme is going to expire on June 30 therefore the time is limited for completion of the pending 9th review under the $6.5 billion Extended Fund Facility (EFF).
If the staff-level agreement is reached by evolving a broader consensus on three contentious issues including external financing, budgetary framework, and sticking to the free market exchange rate then the programme will be revived otherwise the programme will be met with failure.
However, the sources said that Pakistan would be left with no other option but to seek another IMF programme next fiscal year keeping in view debt external repayments of $25 billion.
It does not include the current account deficit and if it is projected in the range of $7-8 billion for the next fiscal year then the total external financing requirements will be stretched up to $32-33 billion in 2023-24.