Monday May 27, 2024

IMF chief expects Pakistan to avoid default

Securing confirmation from international partners to meet the financing gap requirements of Pakistan, says IMF chief

By Mehtab Haider
April 14, 2023
A woman walks past a building of the International Monetary Fund. — AFP/File
A woman walks past a building of the International Monetary Fund. — AFP/File

ISLAMABAD: IMF Managing Director Kristalina Georgieva said on Thursday Pakistan had not reached the default level and hoped it would not reach that level.

Addressing a news conference on the spring meeting of Breton Wood Institutions (BWIs) at the Washington-based Fund headquarters, Kristalina said they were securing confirmation from international partners to meet the financing gap requirements of Pakistan.

To a question about the looming default risk facing Pakistan, she said Pakistan had not yet reached that level and it would not be but the country required a sustainable policy framework to avert such risks. She hoped Pakistan would complete its ongoing programme. She also said Pakistan was at the forefront of climate change risk.

Meanwhile, Minister for Finance and Revenue Senator Mohammad Ishaq Dar Thursday attended the IMF/World Bank spring meetings via Zoom from Islamabad with the IMF Deputy Managing Director Ms Antoinette Moniso Sayeh. During the meeting, the sources quoted Ms Sayeh as saying that Pakistan was yet to meet its external financing gap of $6 billion out of which $3 billion would be needed to be financed before striking a staff-level agreement.

On this point, the sources said Governor SBP Jameel Ahmed, currently visiting Washington for attending the IMF/WB Spring Meeting, told the participants that the UAE had shared the draft agreement for the provision of an additional $1 billion deposit in order to meet the requirement for signing the SLA.

A top official hoped that the UAE deposit was expected to be confirmed shortly. When quizzed about the timeline, he hoped that it might be done by next week. On cross-fuel subsidy, the IMF was told that it was just an idea floated by a relevant ministry and it would be implemented only after an agreement on the salient features of the scheme. The Pak authorities agreed with the IMF that the scheme looked good on paper but its transparent implementation would be really difficult.

According to a statement issued by the Ministry of Finance, Dar and Ms Sayeh discussed the economic and financial policies and reforms and initiatives taken by the Government of Pakistan for the implementation of prior actions for the ongoing IMF programme.

Dar apprised her of the country’s economic outlook and shared with her the government’s initiatives for bringing economic stability leading to growth. He informed her that all prior actions for the 9th Review under the Extended Fund Facility had already been completed and the Government of Pakistan was fully committed to fulfilling its obligations as agreed to with the IMF.

Ms Sayeh appreciated the government’s policies and supported its initiatives in various sectors in terms of implementation of prior actions agreed to with the IMF. She further extended her support to continue working together and showed confidence that the SLA would be signed very soon.