Pakistan’s Finance Minister, Ishaq Dar, expressed his commitment to complete the $7 billion Extended Fund Facility program with the International Monetary Fund (IMF). According to him, the country is on the verge of signing a staff-level agreement, and his team is committed to fulfilling all sovereign commitments made by the previous administration.
The agreement, which has been postponed since last year, would result in a $1.2 billion payout and open up inflows from allies.
Since the country only has enough reserves to cover three weeks’ worth of essential imports and elections are scheduled for November, Pakistan is currently working against the clock to implement the measures necessary to reach an agreement with the IMF.
The lender’s requirements are designed to ensure that Pakistan reduces its fiscal deficit prior to the release of its annual budget in June.
Speaking in Islamabad at a seminar sponsored by the Finance Ministry, Dar admitted that Pakistan’s economy was in ruins when the current administration took office.
Although the previous administration had accepted the IMF’s loan offer, it had changed a few terms before leaving office, severely undermining Pakistan’s relationship with the lender.
In order to best serve Pakistan’s future economy, the minister urged all political parties to come together and sign a charter of economic principles.
The recent austerity plan announced by the prime minister, Shehbaz Sharif, included, among other things, a ban on the purchase of luxury vehicles beginning in 2024 as well as cabinet members forgoing their salaries and paying their own bills. Dar claimed that these actions had already been taken and the Finance Ministry informed.
The devastating floods of 2022, which affected 33 billion people and resulted in physical and economic losses of close to $30 billion, have made Pakistan’s economic problems even worse. Together, the federal and provincial governments have set aside Rs 452 billion for flood victims’ relief and rehabilitation efforts.
Dar pledged that they would help those in need with additional resources if necessary. According to estimates from international organisations, Pakistan will need to spend roughly $16 billion on reconstruction and rehabilitation over the next two years.
The minister bemoaned the fact that “petty politics” were being practised in Pakistan despite the fact that the nation was beset by numerous crises. He brushed off persistent false information that the nation was breaking its international obligations as being completely untrue and meaningless.
In order to support Pakistan’s future economy, Dar urged all political parties to act impartially and sign a charter of economic principles.
The Pakistani Finance Minister concluded by expressing his team’s commitment to seeing the Extended Fund Facility programme through to its successful conclusion. Most of the other previous steps needed to ensure that Pakistan’s fiscal deficit is reduced, including austerity measures, have already been taken by the government.
Dar acknowledged Pakistan’s economic challenges, which were exacerbated by the devastating floods of 2022, and he pleaded with international organisations to aid Pakistan’s recovery and reconstruction efforts. The minister bemoaned the practice of “petty politics” in Pakistan and urged all political parties to cooperate for the benefit of the future economic health of the nation.
