Pakistan's Premier Multilingual News Agency

Can Pakistan-IMF deadlock see a breakthrough?

The lender's strict conditions have prevented the two parties from reaching a final agreement.

Islamabad, 6 June, 2023 (GNP): As Prime Minister Shehbaz Sharif stated his optimism to settle the deal with the International Monetary Fund (IMF), rumors have arisen that the world’s top lender may combine the 9th and 10th reviews with the bailout plan for Pakistan set to expire on June 30.

Time constraints appear to have prompted the IMF to consider this option, as a deadlock that has persisted since November last year due to the lender’s strict conditions have prevented the two parties from reaching a final agreement and finalizing the staff-level agreement.

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However, the Ministry of Finance told an international news agency that the government had secured $4 billion in external financing and intended to reach an agreement with the Washington-based lender before the budget was unveiled on Friday.

The primary causes of dispute are the IMF’s insistence on improving tax collection and raising fuel/utility prices while maintaining a budget deficit since the government wants to expand targeted subsidies and the development budget.

Also Read: Pakistan seeks US aid to unlock $1.1 billion IMF loan

Moreover, the IMF is also not budging on the issue of external financing by friendly countries such as China and Saudi Arabia.

Earlier on Monday, the prime minister stated, “We are still very hopeful that the IMF programme will materialize.”

According to the prime minister, Pakistan was on the verge of default in April 2022 because the government at that time had breached the IMF deal, and the economy was in shambles.

“We have met all the requirements of the IMF as prior actions,” he said.