Pakistan’s new finance minister, Miftah Ismail, traveled to Washington on Thursday to meet with senior IMF officials to renegotiate a $6 billion bailout package blocked by the former Imran Khan regime.
Under the agreement signed in 2019, Pakistan would receive $6 billion for a period of 39 months, of which it has received only half of the amount so far.
Cash-strapped Pakistan is now eagerly waiting for the international lender to resume talks on its seventh review, which has been put on hold due to political unrest in the country.
“I am leaving for Washington DC to try and get our IMF program back on track which PTI (Pakistan Tehreek-e-Insaf) and IK (Imran Khan) have derailed,” Ismail tweeted before he left.
The finance minister said the previous government’s decision had put Pakistan’s economy at risk.
The meeting with IMF officials will also take place in the presence of the Governor of the Central Bank of Pakistan, Raza Baqir.
If the seventh review is approved, the IMF will release more than 900 million dollars, which would be a welcome antidote for the slowdown of the economy of the country which faces the fall of foreign exchange reserves (10.8 billion dollars) and a current account deficit crisis, according to Geo TV.
The new Shehbaz Sharif government that took power this month must also contend with soaring inflation and an economy that simply refuses to rebound.
In its latest report on Pakistan, the IMF predicted annual growth of 4%, against estimates by the country’s central bank of around 4.8%.
On Wednesday, Ismail, in his first press conference as the country’s finance minister, said the IMF had presented a list of demands for the bailout stimulus to be implemented.
These include the withdrawal of the fuel subsidy, the removal of the tax amnesty program, the increase in the electricity tariff and the imposition of additional tax measures, according to the Geo TV report.
The fuel and electricity subsidies were put in place by Khan days before he was ousted from power, the report added.
Rolling back would be a daunting task for the current government, especially at a time when consumer price inflation in Pakistan reached 12.7% for the month of March.
We cannot allow our external fiscal and financial situation to deteriorate further and see our development partners leave. Hard choices have to be made, Ismail tweeted last week.
After his meeting with IMF officials in Washington, Ismail will travel to London to meet Pakistan Muslim League-Nawaz (PML-N) supremo Nawaz Sharif.
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