ISLAMABAD: Despite receiving confirmation from the United Arab Emirates (UAE) and Saudi Arabia, the International Monetary Fund (IMF) has now asked Pakistan to arrange $8 billion in fresh loans to support the external debt repayments during the coming seven months, for a successful completion of the long-stalled 9th review bailout package, local media reported on Saturday quoting sources.
A staff-level agreement to release a $1.1bn tranche out of a $6.5bn IMF package has been delayed since November 2022 with around 100 days over since the last staff-level mission to Pakistan. Sources said that the IMF has asked Pakistan to arrange $8.4bn in fresh loans aimed at ensuring debt repayments for the May-December 2023 period.
The global lender has asked Pakistan to arrange $6bn in external financing till June 2023 to avoid default. Due to a delay in ensuring these funds, the 9th programme review worth $1.2bn remains incomplete.
On Thursday, Pakistan’s Finance Minister Ishaq Dar said that the country will not make tough decisions on the demand of the IMF anymore. While informally talking to media-persons, he said it is entirely up to the IMF to sign a staff-level agreement.
He clarified that the Pakistani government will not take tough decisions on the IMF’s demand anymore. “We have already implemented pre-conditions of the global lender but not anymore.”
In a scheduled press conference on Thursday, spokesperson IMF, Julie Kozack, said Pakistan needed “significant additional financing” to successfully complete the 9th review.
She said the country’s economy had very large financing needs which had also been affected by a series of shocks, including severe flooding last year. It is to mention here that China, the UAE and Saudi Arabia came to Pakistan’s assistance in March and April with pledges that would cover some of the funding deficit.
