KARACHI (Reuters) – The IMF is preparing to discuss Pakistan’s long-awaited budget plans for next fiscal year. Lenders from cash-strapped countries are part of the capital injection plan, the head of the IMF country mission said on Thursday.
Negotiations on key budget targets such as the fiscal deficit are one of the final hurdles before the IMF approves a staff-level agreement to free up $1.1 billion in funds that have been in place since November. has been postponed, that is, it is essential for Pakistan to solve the serious balance of payments crisis.
The Treasury Department did not immediately respond to a Reuters request for comment.
“Across all IMF programs, the IMF mission chief in Pakistan, Nathan Porter, told Reuters that the authorities issued a letter of intent related to the previous review outlining their Policy intentions in the period after the end of the program.
On Thursday, Finance Minister Mohammad Ishaq Dar reiterated that Pakistan has complied with all previous actions of the 9th IMF Review.
Prior to this, the government said external financing was the last hurdle to a deal.Pakistan must ensure its balance of payments deficit is fully financed for the fiscal year ending in June to free up the next batch of IMF
The United Arab Emirates, Saudi Arabia and China provided financial assistance to Pakistan in March and April.
The first 9-reviewed successful SLA will free up $1.1 billion in funds.
This money is part of the $6.5 billion bailout package approved by the IMF in 2019 Part of the program, which is due to end in June, earlier than budgeted. So far, Pakistan has received $3.9 billion during the current program period until its 8th review.
In response to questions about the Questioned about the possibility of merging the 9th and reviews as the latest program draws to a close, the IMF’s Porter said the current baseline is to review them sequentially
The country is emerging from an economic crisis with inflation soaring to 2019.4%, the highest on record, the highest in South Asia.
The government has removed exchange rate caps, imposed taxes, raised energy tariffs and scaled back subsidies in an attempt to free up IMF money. It has also raised key interest rates to a record 21%.