ISLAMABAD: Prime Minister Shehbaz Sharif on Saturday once again met International Monetary Fund (IMF) Managing Director Kristalina Georgieva in Paris and reiterated Pakistan’s commitment to complete a $6.5 billion loan program, Pakistani media reported, as the South Asian country struggles to get the bailout funds.
The meeting took place on the sidelines of the Global Financing Summit in Paris. Pakistan has less than a week to go before the IMF’s Extended Fund Facility agreed in 2019 expires on June 30. Under the $6.5 billion facility’s ninth review, negotiated earlier this year, Pakistan has been trying to secure $1.1 billion of funding stalled since November.
With central bank foreign exchange reserves barely enough to cover one month of controlled imports, Pakistan is facing an acute balance of payment crisis, which analysts say could spiral into a debt default if the IMF money doesn’t come through.
The prime minister appreciated the IMF chief for considering economic realities of Pakistan, the state-run Radio Pakistan broadcaster reported.
“Pakistan values the world’s support to overcome its severe economic challenges,” PM Sharif was quoted as saying in the report. “Pakistan is determined to fulfill its all commitments. [The] government desires to maintain balance between people’s relief and economic realities of the country.”
The prime minister agreed that “inevitable measures” would have to be taken to overcome the economic crisis that has engulfed Pakistan over the last four years.
Pakistan also changed its budget for the financial year starting on July 1, Finance Minister Ishaq Dar said on Saturday, including the latest fiscal tightening measures dictated by the IMF in a final effort to clinch a stalled rescue package.
“Pakistan and IMF had detailed negotiations for the last three days as a last effort to complete the pending review,” he told parliament.
For the fiscal year starting next month, Pakistan will raise a further 215 billion rupees ($752 million) in new tax and cut 85 billion rupees in spending, as well as a number of other measures to shrink the fiscal deficit, he said.
That will revise Pakistan’s revenue collection target to 9.415 trillion rupees ($33 billion) and put total spending at 14.480 trillion rupees ($51 billion), Dar said. “These changes will make our fiscal deficit much better,” he added.
