IMF bailout loan to Pakistan: resolve policy differences before getting much-needed loan

IMF Managing Director Kristalina Georgieva has urged Pakistan's Prime Minister Shehbaz Sharif to resolve policy differences at the global lender's staff level prior to getting a much-needed loan to stabilise the cash-strapped country's economy, according to a media report.

Georgieva said this during her meeting with Prime Minister Shehbaz Sharif that took place on Thursday on the sidelines of the New Global Financial Pact summit in Paris, The Express Tribune reported on Thursday.

"Prime Minister Sharif met IMF MD Kristalina Georgieva. During the meeting she emphasised and insisted that all the policy matters should be resolved at the IMF staff level," the report said.

The International Monetary Fund (IMF) signed a deal in 2019 to provide USD 6 billion to Pakistan on the fulfilment of certain conditions.

The plan was derailed several times and the full reimbursement is still pending due to insistence by the donor that Pakistan should complete all formalities.

During the meeting, Georgieva did not immediately concede to the demand by Prime Minister Sharif for a board meeting date for the approval of the 9th review and the release of the third last loan tranche of USD 1.2 billion, the report said.

The report, quoting sources, said that Prime Minister Sharif also underscored that all prior actions for the ninth review under the Extended Fund Facility (EEF) had been completed and the government of Pakistan was fully committed to fulfilling its obligations as agreed with the IMF.

A member of the federal cabinet joined from Paris the technical round of talks, which took place in Islamabad after the meeting between the IMF MD and Prime Minister Sharif.

Both sides again discussed all the outstanding issues and the government appeared to accept the IMF’s views on a few budgetary numbers, the officials said.

They continued that another round of talks might take place soon.

It was the second time in less than a month that Prime Minister Sharif has directly talked to the IMF MD in addition to sending her at least three letters regarding the loan that debt-ridden Pakistan desperately wants, the report said.

The meeting took place a week before the expiry of the current four-year-long programme ending on June 30.

Pakistan's efforts to unlock access to the already agreed USD 6 billion loan package are in a quagmire as the budget needs to satisfy the global lender to secure the release of more bailout money for the cash-strapped country.

It is feared that Pakistan might default on external financing commitments without the active support of the IMF.

Pakistan’s economy has been in a free fall mode for the last many years, bringing untold pressure on the poor masses in the form of unchecked inflation, making it almost impossible for a vast number of people to make ends meet.