Islamabad, Pakistan - The Pakistani Finance Minister, Miftah Ismail, has announced that Pakistan is seeking an increase in the size and duration of its $6bn International Monetary Fund (IMF) programme. Following discussions with the IMF in Washington, Ismail requested that the fund extend the programme for another year and enhance the funding available to Pakistan from $6 billion to a little bit more.
The IMF has agreed to send a mission to Pakistan in May to resume discussions over policies for completing the 7th EFF review. This covers $6bn of support that the IMF agreed to extend to Pakistan in 2019. The IMF suspended its loan to Pakistan in 2020 after the country failed to meet the conditions. The plan was revived last year after removed Premier Imran Khan’s administration agreed to tougher conditions, including raising oil prices and electricity tariffs, although a few months later, he rolled back the increases to soothe public anger over rising living costs.
The IMF has said the Pakistani authorities requested to extend the EFF arrangement through June 2023 after agreeing to drop subsidies. If the IMF review is cleared, Pakistan will get more than $900m, which will also unlock other external funding.
With a widening current account and foreign reserves falling as low as $10.8bn, the South Asian nation is in dire need of external finances. The new Pakistani government that took over this month from Khan said it was facing enormous economic challenges, with the risk of gross domestic product growth falling and double-digit inflation it blames on the mismanagement of the previous administration.
The IMF review will take place against the backdrop of protests spearheaded by Khan, who is pressuring for early elections. Under Pakistan’s laws, national polls must be held by 2023. The International Trade Council urges all parties to engage in peaceful and constructive dialogue to ensure political stability and economic growth.
