Fear of Default Grips Pakistan Once More as IMF Keeps Nation out of Agenda List

Pakistan is not on the agenda list of the International Monetary Fund (IMF) despite the ninth review under the Extended Fund Facility (EFF) programme remaining pending.

The IMF executive board issued meetings till July 6 but Pakistan is not on its list of agendas. The IMF snub comes despite Prime Minister Shehbaz Sharif reaching out to IMF managing director Kristalina Georgieva for the fourth time in six days.

Sharif also met the IMF MD in France during the New Global Financial Pact summit in Paris where both of them reportedly had a productive discussion and the Pakistan Prime Minister Sharif said that the ninth review will be completed soon. During the finance summit, Sharif and Georgieva met thrice.

Pakistan is scrambling to revive the stalled bailout programme as it faces an economic crisis but the IMF remains unsatisfied with the route the government has taken.

The fear of default looms over Pakistan as rating agencies and economists fear that the $350 billion economy is in dire state and needs the $1.1 billion loan tranche of the EFF so that other friendly countries can also lend money to Islamabad.

Since the IMF is unhappy with Pakistan’s steps, it is unlikely that friendly countries like the UAE and Saudi Arabia will make concrete moves to help Pakistan amid this economic crisis.

Shehbaz Sharif also said in a statement released by the Pakistan Prime Minister’s Office that both of them discussed matters related to the stalled bailout programme. Though the IMF acknowledged that Islamabad is making efforts to revive the loan, the issue remains unlisted on its agenda for the coming week.

To appease the IMF, Pakistan promised to raise taxes by $750 million and axe spending in its annual budget.

A separate report by Dawn earlier this month cast doubt that the IMF would be happy with the recent budget tabled by the Sharif-led government.

Finance minister Ishaq Dar and even his predecessor Miftah Ismail also batted for the budget and said it will resolve outstanding issues with the IMF but people familiar with the developments in Pakistan as well as in Washington remained pessimistic about the possibilities.