ISLAMABAD: After months-long wrangling between the International Monetary Fund (IMF) and the government over the tightly-negotiated ninth review of the bailout package, a breakthrough has likely been reached, Geo News reported Saturday, citing sources.
The sources further said an official announcement regarding the deal’s signing is expected soon.
The development comes after a flurry of meetings between the two sides following Prime Minister Shehbaz Sharif’s huddle with IMF Managing Director Kristalina Georgieva in Paris earlier this week.
The meeting on the sidelines of the Global Financing Summit in Paris came with about a week left before the IMF’s Extended Fund Facility (EFF) agreed in 2019 expires on June 30.
Under the $6.5 billion EFF’s ninth review, concluded earlier this year, Pakistan has been trying to secure $1.1 billion of funding stalled since November.
The sources said that obstacles in the conclusion of the ongoing review had been removed after multiple sessions between the lender and the government’s team during the last three days.
“Discussions and preparation for a new draft continued till today and the two sides have reached a consensus,” the sources said.
Finance Minister Ishaq Dar and his team held several rounds of talks with the lender to address their concerns on the budget 2023-2024.
The sources claim that the review will be completed as soon as possible.
“The two sides have finalised the new draft,” the sources confirmed.
With central bank foreign exchange reserves barely enough to cover one month of controlled imports, Pakistan is facing an acute balance of payment crisis, which analysts say could spiral into a debt default if the IMF money doesn’t come through.
Moreover, IMF’s funding is critical to unlock other bilateral and multilateral financing.
Islamabad has expressed frustration over the delay, arguing it has met all the painful fiscal measures the lender requested.
The Washington-based lender, however, still has concerns over Pakistan’s external financing gap, foreign exchange market operations and the budget presented earlier this month which it said violated the programme’s objective.
Pakistan had defended the budget but at the same time offered to review it in any further talks with the IMF.