According to the International Monetary Fund (IMF), Pakistan has recently achieved significant strides towards the renewal of the bailout.
“Significant progress has been achieved in recent days in discussions towards policies to support the ninth EFF review, as authorities have also recognised. The top objective at this time is to make sure there is enough funding to assist the authorities in implementing its policy agenda, said the lender’s resident representative Esther Perez Ruiz on Monday.
“A staff-level agreement will follow after the few outstanding issues are resolved,” she continued.
Ruiz disclosed that the IMF had not been engaged over the government’s intention to increase fuel costs for those with higher incomes in order to provide a subsidy for those with lower incomes.
She continued, “IMF staff is looking for more information regarding the operation, cost, targeting, fraud and abuse protections, and balancing measures, and will carefully address these issues with authorities.
For $6 billion in extra loans, Pakistan requires guarantees from bilateral creditors, or else it runs the danger of delaying the IMF SLA. With the exception of the need for foreign financing, the South Asian country has already completed practically all of the lender’s first requirements.
Given that Pakistan needs to make significant debt rollovers, the IMF has relied on Pakistan’s bilateral creditors to increase available money since negotiations for the 9th review got underway last year.
It is important to note that Pakistan projected a financing gap of $5 billion, whereas the Fund projects one of around $7 billion for the current fiscal year.