Pakistan, IMF negotiations underway to ‘quickly’ reach pact

The discussions between the International Monetary Fund (IMF) and Pakistan are underway to “quickly” revive the stalled bailout package, global lender’s mission chief to Pakistan Nathan Porter said on Tuesday.

“Over the past few days, the Pakistani authorities have taken decisive measures to bring policies more in line with the economic reform programme,” he said in a statement.

The measures include the passage of a budget by the parliament that broadens the tax base while opening up space for higher social and development spending as well as steps towards improving the functioning of the foreign exchange market and tightening monetary policy to reduce inflationary and balance of payment pressures that affect particularly the more vulnerable,” the statement added.

“The IMF team continues discussions with Pakistani authorities with the aim of quickly reaching an agreement on financial support from the IMF,” the official added.

The statement came hours after Prime Minister Shehbaz Sharif said that Pakistan expects a decision on the IMF stalled bailout programme within a day or two as the struggling country continues to meet the lender's demands.

The prime minister expressed hope after his telephone call with IMF Managing Director (MD) Kristalina Georgieva — his fourth contact with the lender's boss in six days.

Rating agencies and economists fear that the $350 billion economy could default on its foreign debt obligations if it fails to secure the $1.1 loan tranche of the Extended Fund Facility (EFF).

The premier spoke to the IMF chief over the phone earlier today after meeting her thrice — from Thursday to Saturday — on the sidelines of the New Global Financial Pact summit held in Paris, France.

The PM's Office released a statement that the IMF chief and the prime minister discussed matters related to the stalled bailout programme.

On the call, the IMF chief acknowledged Finance Minister Ishaq Dar and his team's efforts for attempting to revive the loan — after policy matters were discussed in Paris.

PM Shehbaz expressed hope that coordination on the points of the bailout programme would lead to a decision from the Washington-based lender in a day or two.

"The prime minister also reiterated his determination to achieve the goals of improving the economic situation through joint efforts," the statement read.

The statement added that while hoping Pakistan's economic situation would improve, the IMF chief appreciated the prime minister's determination.

Earlier today, Finance Minister Ishaq Dar said that the government is looking for a mechanism to receive all $2.6 billion stalled funds from the IMF.

Speaking on Geo News' Capital Talk programme, he said that the nation will soon hear “good news” regarding stalled bailout package as the “next one or two days are important”.

“We are trying our best to complete the 9th [IMF] review and the nation will receive good news soon,” the financial czar added.

The South Asian nation is going through its worst economic crisis amid record inflation and interest rates, but it has seen prospects for its IMF loan take a positive turn before it expires at the end of the week.

With the bailout programme set to expire on June 30, the federal government has also revised its FY24 budget and hiked policy rates to 22% in its desperation to clinch the deal, the key to unlocking other external financings for the cash-strapped nation.