Pakistan’s Finance Minister Ishaq Dar is scheduled to lead a high-level delegation to the United States to attend the annual spring meeting of the International Monetary Fund (IMF) and the World Bank. The primary objective of the delegation is to negotiate a $1.1 billion bailout for Pakistan with the IMF and present fresh proposals for dollar inflows. This meeting, also known as the Annual Spring Meeting of the Breton Wood Institutions, is a critical platform for developing countries like Pakistan to engage with the international financial institutions and discuss policies to promote economic growth and stability.
During the meetings, Pakistan and the IMF will engage in discussions aimed at merging the remaining 10th and 11th reviews under the $6.5 billion Extended Fund Facility program, subject to the condition that the pending 9th review is completed. The outcome of these discussions will be critical for Pakistan’s economic stability and growth prospects, given the significant challenges it faces, including a widening trade deficit, low foreign exchange reserves, and high levels of external debt.
Overall, this delegation’s participation in the IMF and World Bank’s annual spring meeting is crucial for Pakistan, as it presents an opportunity for the country to engage with the international community and chart a path towards sustainable economic development.
Pakistan’s Finance Minister Ishaq Dar will lead a delegation to the U.S. to attend the Annual Spring Meeting of the International Monetary Fund (IMF) and the World Bank, where they will negotiate a $1.1 billion bailout for Pakistan and present fresh proposals for dollar inflows. The delegation will include officials from the Finance and Economic Affairs Division and the State Bank of Pakistan (SBP). The meeting, known as the Annual Spring Meeting of the Breton Wood Institutions, will take place from April 10 to 16. Pakistan and the IMF will also discuss the possibility of merging the 10th and 11th reviews under the $6.5 billion Extended Fund Facility (EFF) program if the pending 9th review is completed.
Due to Pakistan’s cash-strapped situation, the country is eagerly waiting for the $1.1 billion funding from the IMF, which was originally supposed to be disbursed in November 2021. This amount is part of a $6.5 billion bailout package approved by the IMF in 2019. Analysts suggest that this funding is critical for Pakistan to avoid defaulting on its external debt obligations.
The IMF program, which was signed in 2019, is set to expire on June 30, 2023. Under the program guidelines, the program cannot be extended beyond the deadline. The pending 9th review was supposed to be completed in December 2022, while the 10th review was to start in February 2023, and the 11th review was to commence on May 3.
Pakistan and the IMF have been in negotiations for months to resume the $7 billion IMF program, but a deal has yet to be reached. Pakistan is currently facing a major economic crisis due to high external debt, a weak local currency, and dwindling foreign exchange reserves, which are only sufficient to cover a month’s imports. The volatile political situation in the country has also become a factor in delaying a much-needed deal with the IMF. Despite the challenges, the Pakistani government believes that it has taken all necessary tough decisions to revive the stalled IMF program.
