The International Monetary Fund (IMF) has said that the timely finalization of the flood recovery plan was important for the continuation of negotiations and the financial support from bilateral partners.
According to Reuters Pakistan has been facing a severe economic crisis after the recent devastating floods while inflation in the country currently remained at the highest level in decades and foreign exchange reserves were also declining rapidly.
Pakistan started a $6 billion bailout program with the IMF in 2019 the ninth instalment of which has not yet been received.
Esther Perez Ruiz, the IMF’s representative in Islamabad, told Reuters that the timely finalization of the recovery plan was critical to the continuation of negotiations and the financial support from bilateral partners. She said that IMF staff was discussing policies to make humanitarian aid a top priority with Pakistani authorities while efforts were also being made to manage the economy and financial stability.
More than 1,700 people were killed and billions of dollars were lost due to devastating floods in Pakistan. The federal government estimated the damage from the floods to be $10 to $40 billion.
Last week Finance Minister Ishaq Dar said that the engagement at the technical level has been completed quickly to move forward with the IMF’s 9th review program but the date for reviewing its completion is yet to be announced.
IMF funds are very important for Pakistan’s economy because the country currently seeks external debt repayment and economic assistance to get a positive rating from international markets and rating agencies.
Pakistan has to pay international bonds of $1 billion early next month while the foreign exchange reserves of the State Bank of Pakistan stood at $7.9 billion as of last week.