Minister denies backtracking from IMF bailout deal

May 18, 2023 (MLN): Pakistan is not backtracking from the much-awaited $6.5 billion International Monetary Fund (IMF) bailout program, Dr. Aisha Ghaus Pasha, Minister of State for Finance and Revenue stated while speaking to journalists after the meeting of the Senate Standing Committee on Finance on Wednesday.

“We are in touch with the IMF and talks are ongoing between the Federal Board of Revenue (FBR) and Finance Division,” she clarified.

She further added that Pakistan wants to continue this program as the coalition government has paid a political price while making efforts to meet the conditions laid forth by the fund.

The coalition government will present its second budget since coming into power in April last year in the first week of June, she informed.

The finance minister will table the Finance Bill 2023-24 in the National Assembly on June 9 while the Economic Survey 2022-23 will be released on June 8, as per media reports.

To prevent a default, Pakistan has been negotiating with the IMF to restart a $6.5bn bailout program.

Earlier this month, Federal Minister for Finance and Revenue, Senator Muhammad Ishaq Dar stated that Pakistan would not default on its financial obligations, even if the stalled loan program with the International Monetary Fund (IMF) remained unsettled.

“On IMF instructions we cannot take more harsh decisions,” he said while addressing Islamabad Security Dialogue last week.

Senator Dar's speech came at a time when the country’s foreign exchange reserves are rapidly depleting, leaving the IMF bailout package as the only feasible option to ease the crisis.

However, at present the SBP is left with only $4.38bn as of May 5, 2023, indicating the urgency of funds.

At the same time, Moody’s Investor Service warned that Pakistan could default without an IMF bailout as its financing options beyond June are uncertain.

As the economic crisis lingers, it is important for the government to prioritize effective financial management as any misstep could aggravate the country's dire economic predicament.

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