ISLAMABAD: Miftah Ismail, likely to be finance minister in the new administration of Prime Minister Shehbaz Sharif, has said the PM had given him the go-ahead to begin engaging with the International Monetary Fund on the revival of the seventh review of a $6 billion rescue programme agreed in July 2019.

Sharif, who was elected this Monday, faces the daunting task of managing a stuttering economy with huge deficits.

“PM Shehbaz has asked me to engage with the IMF, as the government is keen to remain in the IMF programme,” Ismail told Pakistan's Express Tribune newspaper.

In February, the IMF approved a $1 billion disbursement to Pakistan after completing a sixth review of the country's reforms under the loan program.

The IMF programme is currently stalled for the third time in three years after seventh review talks collapsed due to the outgoing government of Imran Khan announcing fuel subsidies and a tax amnesty scheme. Of the $6 billion loan, $3 billion is yet to be disbursed with only five months remaining before the expiry of the programme.

Pakistan's current account deficit is projected at around 4% of GDP for the 2022 fiscal year (FY), the country's central bank said last week, while foreign reserves dropped to $11.3 billion as at April 1, compared with $16.2 billion less than a month earlier.

The central bank last week hiked key interest rates by 250 basis points to 12.25% in an emergency decision, the biggest hike in decades, citing deterioration in the outlook for inflation and an increase in risks to external stability, heightened by the Russia-Ukraine conflict, as well as local political uncertainty.

The bank also revised average inflation forecasts upwards to slightly above 11% in FY22, which ends in June.