Pakistan to negotiate new IMF program after budget pending reviews to be closed

The Government of Pakistan plans to initiate negotiations with the International Monetary Fund (IMF) for a new program following the introduction of the new budget. As reported by Geo News, the coalition government intends to close the ongoing $6.5 billion bailout program without completing the pending reviews.

It is deemed impossible to complete the reviews before the end of June, and the government has decided against seeking an extension. However, Pakistan is expected to urgently require an IMF program in September, as the country faces repayments of external debt amounting to approximately $9-11 billion by December 2023.

The economic team has already started working on the new deal, which is anticipated to be more challenging than the previous program. In case the coalition government fails to conclude the negotiations by the end of its term in August, the caretaker administration would take charge of the talks with the IMF.

Recently, Minister of State for Finance and Revenue Aisha Ghaus Pasha criticized the IMF for interfering in Pakistan’s internal affairs, asserting that the lender’s role should not extend to involvement in the country’s domestic matters. Pasha emphasized that if an agreement with the IMF cannot be reached, the Ministry of Finance will consider alternative plans, but their priority remains focused on the IMF program.

The government has been engaging with the IMF since November to revive its bailout program, but issues related to financing have hindered the agreement. Notably, Pakistan is yet to receive the remaining $2.5 billion from the $6.5 billion program, which is set to expire this month.

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