The International Monetary Fund (IMF) has asked Pakistan to arrange fresh loans worth $8 billion to support external debt repayments over the next seven months for the completion of the long-stalled 9th review bailout package.
A staff-level agreement to release a $1.1 billion tranche out of a $6.5 billion IMF package has been delayed since November 2022 with around 100 days over since the last staff-level mission to Pakistan.
Despite receiving confirmation from Saudi Arabia and the United Arab Emirates (UAE), the IMF has asked Pakistan to arrange $8.4 billion in fresh loans for debt repayments for May-December 2023 period to avoid default.
The delay in arranging these funds has caused the ninth programme review worth $1.2 billion to remain incomplete.
“No more tough decisions”
Pakistan’s Finance Minister, Ishaq Dar, has stated that the government will not make any more tough decisions on IMF’s demand anymore. While informally talking to the media, he said it is entirely up to the IMF to sign a staff-level agreement. He clarified that Pakistan has already implemented the pre-conditions of the IMF.
This comes after the IMF spokesperson, Julie Kozack, stated that Pakistan needed “significant additional financing” to successfully complete the ninth review.
She said the country’s economy had very large financing needs which had also been affected by a series of shocks, including severe flooding last year.
It is to mention here that China, the UAE, and Saudi Arabia came to Pakistan’s assistance in March and April with pledges that would cover some of the funding deficit. But the IMF is requesting further arrangements be made to secure the repayment of debts.