Shehbaz Sharif, the prime minister of Pakistan, met with the head of the International Monetary Fund (IMF) on Thursday outside of a global finance summit in Paris in an effort to release a $6 billion bailout and a crucial tranche of $1.1 billion in loans that had been stalled since November.
A week before the $6 billion bailout deal first agreed upon between the international lender and the nation’s former Prime Minister Imran Khan in 2019 expires, Shehbaz Sharif met with Kristalina Georgieva, managing director of the IMF, at the Summit for a New Global Financing Pact.
After a no-confidence vote in parliament, Shehbaz Sharif succeeded Khan in April 2022. Since that time, Pakistan has seen an unheard-of economic disaster.
IMF and Pakistan
The discussion on Thursday occurred a week after the IMF criticized a draught yearly budget that Pakistan’s government had submitted to parliament.
As promised in the bailout deal, a fairer tax structure was not implemented in the draught budget, according to Esther Perez Ruiz, the IMF’s representative for Pakistan.
Ruiz’s comments caused some people to worry that the bailout might not happen. According to analysts, the agreement is essential since the release of the next loan tranche would inspire other international financial institutions to assist the Islamic country.
At a time when Pakistan is battling to avert a default with financial assistance from China, Saudi Arabia, and the United Arab Emirates, the failure of the rescue might cause an economic disaster.
Floods that occurred last summer, killing 1,739 people and causing $30 billion in damage, have made it harder for the economy to recover.
Even though his government complied with all the terms of the pact, which expires on June 30, the PM has recently complained that the IMF is being difficult to Pakistan.
According to a government statement, Shehbaz Sharif and Georgieva discussed how Pakistan and the IMF could work together as the prime minister described steps made to boost the economy.
He assured Georgieva that Pakistan was completely committed to upholding its end of the bargain with the IMF and expressed his hope that the IMF would swiftly release the crucial $1.1 billion tranche from the $6 billion bailout.
“This would help strengthen Pakistan’s ongoing efforts towards economic stabilization and bring relief to its people,” he told the IMF head, according to the statement.
It said the IMF head “shared her institution’s perspective on the ongoing review process.”
A week has passed since a migrant boat off the coast of Greece capsized while carrying at least 750 people. More than 500 migrants, including some Pakistanis and some Afghans, remain unaccounted for.
Sharif will meet with other leaders while in Paris to discuss a range of topics, including how to develop commercial and trade relations to aid Pakistan in overcoming its economic crisis.
To read our blog on “Pakistan might default without new IMF agreement in 2023,” click here.