According to The Express Tribune, the government is forced to save the deal after the International Monetary Fund (IMF) rejected Pakistan’s plea to lower the necessity of obtaining $6 billion in extra loans.
Pakistan’s sole choice, according to Dr. Aisha Pasha, Minister of State for Finance, is to rejoin the IMF, she said during a National Assembly Standing Committee on Finance hearing. The committee also addressed the potential of holding Finance Minister Ishaq Dar in contempt of Parliament for skipping the meeting.
Pakistan’s inflation rate is at its highest point since 1957 as the economy of the nation battles to recover. The nation currently leads all of Asia in terms of inflation rate, overtaking Sri Lanka. The shocking 38% inflation rate as of May 2023 presents significant challenges for both the government and the populace of Pakistan.
Dr. Pasha disclosed that Pakistan had urged the IMF to take the current account deficit’s revised statistics into consideration while decreasing the external funding demand, but the request was denied. She went on to say that although a staff-level agreement had been reached, $3 billion was still needed, but the IMF insisted on seeing proof of the $6 billion. Dr. Pasha emphasized that there was no other option than returning to the IMF and that there was no fallback position in the event that talks broke down.
There isn’t any choice but to return to the IMF, and I firmly state that there isn’t a Plan B, according to Dr. Aisha Pasha.
Dr. Ramesh Kumar, a member of the National Assembly (MNA), credited Pakistan’s foreign policy direction for the protracted delay in commencing the IMF project. According to Dr. Pasha, plans call for Pakistan to receive $4.5 billion from Saudi Arabia, the United Arab Emirates, the World Bank, and Geneva Commitments. The final $1.5 billion will be established once a staff-level agreement has been reached, he added.
In a separate statement, Finance Minister Dar expressed confidence that a staff-level agreement would be reached in June and provided assurance that Pakistan’s external funding was in order. While saying that the budget typically complies with IMF recommendations, Dr. Pasha stated that Pakistan has presented its fiscal year 2020 budget with the IMF and was awaiting comments. According to ANI, committee members expressed worry about the government’s choice to share budget data with the IMF but not with MPs.
Of the whole $6.5 billion bailout plan, the IMF has already paid out $3.9 billion, with the remaining amount contingent on the conclusion of three ongoing assessments. As long as talks with the IMF go on, the administration will make an attempt to save the deal and get the money it needs.
