Pakistan, which is facing serious economic crisis and inflation, has got another setback. Despite the help of Saudi Arabia and UAE, Pakistan is in danger of default. The only way to avoid this is the International Monetary Fund (IMF) which has refused to send its team to Pakistan to complete the loan review.
Shehbaz Sharif’s government is in dire need of a loan from the International Monetary Fund (IMF) to permanently end the threat of Pakistan defaulting.
Rejecting Pakistan’s request to send its team, the IMF has asked the Finance Ministry to first fulfill all the instructions given by the IMF in the recent past. After that the team will be sent.
Pakistan recently requested the IMF to send its review team to Islamabad to complete the pending ninth review under the $7 billion Extended Fund Facility (EFF).
IMF’s tough stance towards Pakistan
Regarding the loan program, in November 2022, the IMF had given advice to the Government of Pakistan and said that the government should first reduce its expenditure, only then the IMF would give loan.
The IMF had given strict instructions to Pakistan to eliminate additional circular loans of Rs 500 billion as well as increase energy prices and introduce new taxes.
If Pakistan does this then the already skyrocketing inflation will increase further. The Shehbaz government fears that with this move, the already aggressive PTI chief and former Prime Minister of Pakistan Imran Khan may become more aggressive on the government.
What is the solution with the Shahbaz government
Even after taking loans from Saudi Arabia and UAE, there is a danger of default on Pakistan. Because Pakistan has to repay foreign debt of more than $ 13 billion from January to June 2023. Even after the loan rollover of UAE, Pakistan has to repay a debt of about $10 billion. That’s why the only solution Pakistan has now is financial help from the IMF.
Pakistan has requested the IMF several times for aid money. But the IMF has asked in strict tone to fulfill all the instructions first.
It has now become necessary for the Shahbaz government to implement the ‘mini budget’. In this mini budget, apart from the increase in energy prices, arrangements have been made to sweeten the bitter pills of IMF.
According to an estimate, if the mini budget is implemented, Pakistan can raise Rs 270 billion.
no option but imf
Recently, Pakistan’s Prime Minister Shehbaz Sharif has chaired two consecutive high-level virtual meetings with the Pak economic team. According to the report, it has been decided in this meeting that there is no other option but to restore the IMF program immediately. Pakistan is working on reaching an agreement with the IMF on all loan terms.