Saul Loeb—AFP
The International Monetary Fund (IMF) mission chief for Pakistan has said the global lender is continuing engagements with Pakistani authorities in a bid to ensure a board meeting before the currently stalled bailout program expires on June 30.
“IMF staff continues the engagement with the Pakistani authorities to pave the way for a Board meeting before the current program expires at end-June,” Nathan Porter told the Reuters news agency. It said the IMF official had said the engagement would focus on the restoration of market-determined currency exchange—in recent days, the differential between the open market and interbank rates has once again ballooned, suggesting some manipulation—as well the passage of a budget for the upcoming fiscal year that is consistent with program goals, and adequate financing.
Porter further said that overcoming the prevailing economic and financial challenges would require “sustained policy efforts and reforms” to establish “strong and inclusive private-led growth.” According to experts, achieving this would require expanding the tax net to include sectors that have historically avoided documentation, including retailers and farmers, as well as property dealers. In addition, there are growing calls to curtail or shutter loss-making state-owned enterprises.
A board meeting for a review of an Extended Fund Facility tends to require a staff-level agreement, which has been pending between the IMF and Pakistan since November 2022. Reviving the program would unlock a $1.1 billion tranche of a $6.5 billion IMF package, while also unlocking additional avenues of financial support.
On Sunday, Finance Minister Ishaq Dar told Geo News that Islamabad will share details of its proposed budget for FY2023-24 with the IMF, adding he would like the global lender to clear its ninth review before the budget passes as all prior conditions had already been met. He also expressed an unwillingness to combine the ninth and 10th reviews, saying this would be “unfair.”
In his interaction with Reuters, Porter also commented on the prevailing political instability of Pakistan. “We take note of recent political developments, and while we do not comment on domestic politics, we do hope that a peaceful way forward is found in line with the Constitution and the rule of law,” he said.