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Pakistan is currently under the grip of a massive economic crisis, as a result of which the deal with the International Monetary Fund (IMF) becomes very important for the South Asian nation, according to Dawn.
However, ahead of the upcoming elections, the country is keeping away from finalising a deal with the monetary body as it is likely that the demands of the IMF can lead to a surge in the price of essential items across the nation. On Monday, official and diplomatic sources informed Dawn that both parties were still debating the seven conditions that Pakistan must meet before the IMF will continue providing financial support to the nation. The demands include ending the electric subsidy programme, tying gas pricing to global markets, allowing dollars to freely fluctuate, and not prohibiting LCs. Currently, Islamabad is awaiting the results of the ninth review of an IMF loan agreement that the previous administration signed. The evaluation would result in the release of Pakistan's pending next instalment of funding, which has been held up since September. In August 2022, the IMF approved the seventh and eighth reviews of Pakistan's bailout program, agreed upon in 2019, allowing the release of more than USD 1.1 billion, Dawn reported. IMF officials have indicated that they are willing to continue working with Pakistan, but the country should first take care of the basic requirements that the IMF has put forward. Right now, the IMF is the only door for Pakistan to unlock its problem regarding the financial crisis. Earlier, Pakistan shared the contours of areas for accomplishing the pending 9th review under the USD 7 billion Extended Fund Facility (EFF). On other hand, Pakistan's near-term challenge has risen sharply as Islamabad will have to secure fresh loans of USD 10 billion in the remaining five months (Feb-June) period to avert default, Geo News reported. Against this backdrop, the government sent out SOS (Save Our Soul) to the IMF for reviving the programme that has been stalled since last November. Since then the country has been on a slippery slope to reaching the brink of total economic collapse. The State Bank of Pakistan (SBP) in its latest monetary policy conceded that near-term challenges for the external sector have risen despite the policy-induced contraction in the current account deficit during the first half of FY23. (ANI)
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