Web Desk, (National Times)- The International Monetary Fund (IMF) is working with Pakistani authorities to conclude the ninth review of a bailout programme, its mission chief said on Friday.
He said funding was critical for the cash-strapped country to avert an economic collapse. Pakistan and the IMF have been discussing fiscal policy measures under review since February to resume the stalled funding that was due in November out of the $6.5 billion bailout agreed upon in 2019.
The money is crucial for Pakistan, which is facing a balance of payment crisis, to avert defaulting on its external payment obligations. Foreign exchange reserves held by Pakistan’s central bank have shrunk to pay just four weeks of controlled imports.
“The IMF continues to work with the Pakistani authorities to bring the ninth review to a conclusion once the necessary financing is in place and the agreement is finalised,” mission chief Nathan Porter said in a statement.
“IMF supports the authorities in the implementation of policies in the period ahead, including in the technical work to prepare the FY24 budget, which is to be passed by the National Assembly before end-June.”
Pakistan’s finance ministry did not immediately respond to a request for comment.
As part of a series of conditions, Pakistan has given an assurance that its balance of payments gap this fiscal year, which ends in June, is fully funded.
Pakistan has announced pledges worth $3bn in financing support from Saudi Arabia and UAE, but the funds have yet to come through. Longtime ally China has rolled over and refinanced its loans to Islamabad.
Pakistan completed a series of actions demanded by the IMF to secure the deal, which included reversing subsidies, hiking energy and fuel prices, raising its key policy rate, switching to a market-based currency exchange rate, lining up external financing, and raising over Rs170 billion ($613 million) in new taxes.
The fiscal adjustments have already fuelled record-high inflation, which hit 36.4 percent in April.
The IMF programme will disburse another $1.4b disbursement for Pakistan before it concludes in June.