Pakistan’s Finance Minister Ishaq Dar said on Sunday (May 28) that his government would share the details of the upcoming budget with the International Monetary Fund (IMF) to unlock stalled funds. Finance Minister Dar said he would like IMF to clear its ninth review before the budget, which would be presented in early June, as all conditions for that were already met.
Speaking to Geo TV, Dar said, “They have asked for some more things again, we are ready to give that too, they say that give us budget details, we will give it to them.” Dar pointed out that it would not work for Islamabad if the IMF combined the ninth and tenth review of the bailout, adding, “We will not do it, (we) see this is (as) unfair.”
IMF funding crucial for Pakistan
The IMF funding is crucial for Pakistan as the South Asian country currently faces an acute balance of payment crisis. According to a report by the news agency Reuters early Monday, the central bank’s foreign reserves have fallen as low as to cover barely a month of controlled imports. The Pakistani economy has slowed, with an estimated 0.29% GDP growth for 2022-2023.
The IMF’s funding of $1.1 billion to Pakistan, which is a part of the $6.5 billion Extended Fund Facility agreed in 2019, has been held up since November last year.
In February this year, Pakistan hosted an IMF mission to negotiate a series of fiscal policy measures to clear the ninth review.
Pak could default without an IMF bailout, warns Moody’s
A few weeks back, Moody’s Investor Service warned that Pakistan could default without an IMF bailout as its financing operations beyond June were uncertain. Speaking to the news agency Bloomberg on May 9, Grace Lim, a sovereign analyst with Moody’s in Singapore, said, “We consider that Pakistan will meet its external payments for the remainder of this fiscal year ending in June.”
“However, Pakistan’s financing options beyond June are highly uncertain. Without an IMF program, Pakistan could default given its very weak reserves,” Lim added.
The analyst also said that an engagement with IMF beyond June would support additional financing from other multilateral and bilateral partners, which could reduce default risk.
(With inputs from agencies)
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