Hopes Dim As Pakistan Tries To Revive Stalled IMF Deal - Capital TV

May 28, 2023


Hopes Dim As Pakistan Tries To Revive Stalled IMF Deal


ISLAMABAD: Pakistan is making a last-ditch effort with the International Monetary Fund (IMF) to revive the pending Extended Fund Facility (EFF) before its expiration on June 30th.

Hopes are diminishing with each passing day as talks between the IMF and Islamabad continue to comply with the ninth review.

The IMF delegation visited Pakistan for talks on January 31, but the discussions concluded on February 9 without reaching a consensus.

Subsequent online sessions have been conducted, but a Staff-Level Agreement (SLA) has not been finalized yet.

Read more: IMF Delay Forces Pakistan to Seek Alternatives

If the budget for 2023-24, expected to be presented on June 9, is approved before the SLA, the ongoing program will fail.

According to ‘The News,’ there are a few remaining options. The first is to sign the SLA immediately and request approval from the IMF executive board for a tranche of $1 billion. Another option is to extend the EFF program for a few months to complete the 10th and 11th reviews.

Check also: ‘IMF Bailout Crucial for Pakistan to Avoid Default’

Alternatively, the 9th and 10th reviews could be combined, and the upcoming budget data could be shared with the IMF. Then, the SLA could be signed after the budget announcement, and if approved by parliament, the IMF’s Executive Board could approve the combined tranches and extend the EFF program to complete the 11th Review by July or August 2023.

“There are no easy options available; both sides will have to work out modalities for evolving consensus. But with the existing approach of maintaining the status quo, no breakthrough can be achieved,” said an anonymous official.

Dr Khaqan Najeeb, former Adviser Ministry of Finance, said “Pakistan’s options are limited and without an IMF programme, the default risk would stay elevated and the reserves weak.”

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