IMF refutes Govt’s assertion of meeting loan requirements

The International Monetary Fund (IMF) said on Friday that the $1.2 billion ninth review of the bailout program will be finished if the required money was in place and the agreement was confirmed. The IMF noted that both parties had reached an understanding on the matter.

The document, cited by local media, illustrates a growing lack of trust between Pakistan and the IMF by refuting the government’s assertion that it has taken all preparatory activities required to complete the 9th review.

The government will also need to satisfy the global lender, a need that the finance ministry officials argue amounts to moving the goalposts along with the budget for the fiscal year 2023–2024.

Pakistan still has $4.5 billion in gross official foreign exchange reserves. Up until June of this year, the nation must pay the rest of the world close to $4 billion in debt-related principal and interest, including $1 billion in SAFE deposits from China.

According to the reports, Pakistan must also secure cash to repay the loans during the first half of the upcoming fiscal year because the government does not have a reliable financial plan for the period between July and December of the following fiscal year.

Less than two months are remaining before the $6.5 billion IMF plan expires. There doesn’t appear to be any chance that Pakistan and the IMF will conveniently finish the three still unfinished program reviews.

Despite receiving a nine-month extension in the program from previous finance minister Miftah Ismail, Pakistan has yet to distribute the $2.6 billion of the $6.5 billion due to its failure to complete the plan requirements on time.

According to media reports, the finance secretary recently requested Nathan Porter to reconsider the demand for a budget agreement for the following year.

However, the IMF might not provide Pakistan with much relief because it is already upset by the government’s conflicting statements over the fulfillment of the requirements.

There are worries that the coalition administration may try to introduce a politically motivated budget, making it harder to pull the nation out of the current economic crisis soon.