ISLAMABAD ( Web News )
The International Monetary Fund (IMF) Executive Board has issued meetings scheduled till June 29 without Pakistan as the ninth review under the Extended Fund Facility (EFF) programme still remains pending, ARY News reported, citing sources.
Pakistan has barely enough currency reserves to cover one month’s imports. It had hoped to have $1.1 billion of the funds released in November – but the IMF has insisted on a number of conditions before it makes any more disbursements.
Sources privy to the development said the IMF had to meet for the release of $1.1 billion tranche under the 9th review of the EFF programme which is expiring on June 30.
Pakistani authorities are optimistic that the fund will complete the ninth review before the deadline and the meeting for the release of the tranche to Pakistan can be summoned at any time.
It may be noted that Prime Minister Shehbaz Sharif in his telephonic conversation with the IMF chief requested for the early completion of the 9th review for the release of the loan.
Last week, the International Monetary Fund (IMF) expressed dissatisfaction with Pakistan’s recently presented budget.
Policy talks are underway with Pakistan. However, the draft FY24 Budget ‘misses’ an opportunity to broaden the tax base in a more progressive way, Esther Perez Ruiz, the International Monetary Fund’s resident representative for Pakistan said.
Esther Perez Ruiz further added that the long list of new tax expenditures further reduces the fairness of the tax system and undercuts the resources needed for vulnerable recipients in the Benazir Income Support Programme.
US-based financial news service, Bloomberg has warned Pakistan of an economic default if the country did not avail International Monetary Fund (IMF) deal.
According to a Bloomberg intelligence report, Pakistan’s economic crisis could further deepen if the country did not avail of the International Monetary Fund (IMF) program and it could land the country into economic default.
The report said that Pakistan’s economy is in dire need of an IMF program as the country has to return $900 million at the end of June and $4 billion from July to December.
If the foreign exchange reserves dropped down below $4 billion, the default threat will further increase, the report added.
Moreover, Pakistan can hold talks with IMF for a new deal in October but the country needs constant help from friendly countries to avoid default.
“The prevailing economic conditions will require assistance from International Monetary Fund (IMF),” the report stated, adding that the assistance from the Monetary Fund will help the country through the end of June.
According to the report, the investors are now worried about a big dollar debt repayment in April 2024, and are pricing those bonds at a distressed level. “In this regard, Pakistan needs more external aid,” it maintained.
The report further stated that the country, which suffered over $33 billion in losses consequent to the unprecedented floods, needs loan from the IMF to recover the damages. “The Fund would issue loans based on country needs”, it added.