According to a media source, the IMF has rejected the cash-strapped Pakistani government's assertion that it has satisfied all requirements to reach an agreement with the international financial organisation to release money under a previously agreed-upon loan facility.
In 2019, an agreement was made for Pakistan to receive $6 billion from the International Monetary Fund, subject to a number of requirements.
Due to the donor's desire that Pakistan finish all legalities, the plan was repeatedly delayed, and the final payment is still waiting.
Ishaq Dar, the minister of finance, and Shehbaz Sharif, the prime minister, have asserted time and time again that there was no justification for delaying the staff-level agreement since Pakistan had fulfilled all the prerequisites.
The Express Tribune newspaper claimed to have received a statement from the fund on Friday refuting the government's assertion that it had taken all preceding steps required to finish the 9th review.
Nathan Porter, the IMF's mission chief in Pakistan, was reported in the newspaper as stating, “The IMF continues to work with the Pakistani authorities to bring the 9th review to a conclusion once the necessary financing is in place and the agreement is finalised.”
Porter's comments refuted what the Pakistani government has been asserting since the face-to-face negotiations concluded inconclusively on February 9th, the newspaper stated.
In order to complete the 9th review for the $1.2 billion loan tranche that has been delayed by seven months, Pakistan must get the amount of money that Nathan did not specify.
Pakistan needs $6 billion, according to the finance minister, to close the funding shortfall by June of this year. Pakistan has received guarantees from Saudi Arabia and the United Arab Emirates that they would provide $3 billion, but there are no clear guarantees for the remaining loans.
Pakistan still has $4.5 billion in gross official foreign currency reserves. Up until June of this year, the nation owes the rest of the globe close to $4 billion in principle and interest on its debt.
According to the sources, Pakistan must also get cash to repay the loans during the first half of the next fiscal year since the government does not have a reliable finance plan for the months of July through December.
According to sources in the Finance Ministry, the repayments of foreign debt, including interest, total $11 billion for the months of July through December.
Pakistan would still need more than $4 billion to repay the foreign creditors during the first half of the next fiscal year, even if China and Saudi Arabia refinance their short-term obligations.
These payments include those made to the Chinese commercial banks, the World Bank, the Asian Development Bank, the Saudi Fund for Development, and the Islamic Development Bank.
In his comments, Porter also made reference to the budget for the next fiscal year, which the administration hopes to release around June 10.
Additionally, Porter said, “the IMF assists the authorities in carrying out policies in the near future, including technical work to create the fiscal 2024 budget, which must be approved by the National Assembly by the end of June.
The Ministry of Finance was annoyed by the IMF's latest requirement since it was already having trouble meeting previous requirements. Senior members of the finance ministry urged that the IMF shouldn't tie the acceptance of the 9th review to the budget for the next year.
According to them, the budget for the fiscal year 2023–24 should be discussed while the 11th review is being discussed.
Under the condition of anonymity, a Cabinet member remarked, “The IMF's demand is worrying.”
There are less than two months remaining until the $6.5 billion IMF plan expires.
According to the article, there doesn't seem to be any chance that Pakistan and the IMF will conveniently finish the program's three remaining evaluations.
According to sources in the finance ministry, the finance secretary recently requested Porter to reconsider the demand for a budget agreement for the next year. However, the IMF may not provide Pakistan with much respite since it is already upset by the government's conflicting statements over the fulfilment of the requirements.
There are worries that the coalition administration may attempt to release a politically motivated budget, making it harder to get the nation out of the current economic crisis soon, according to the newspaper.