Pakistan: Talks in progress to 'quickly reach agreement on financial support'

ISLAMABAD: Ahead of the economic meltdown in Pakistan, International Monetary Fund's Mission Chief to Pakistan, Nathan Porter has said that discussions with Pakistani authorities are underway "with the aim of quickly reaching an agreement on financial support from the IMF", reported Geo TV.

"Over the past few days, the Pakistani authorities have taken decisive measures to bring policies more in line with the economic reform programme," he said in a statement on Tuesday.

"The measures include the passage of a budget by the parliament that broadens the tax base while opening up space for higher social and development spending, as well as, steps towards improving the functioning of the foreign exchange market and tightening monetary policy to reduce inflationary and balance of payment pressures that affect particularly the more vulnerable," the statement added.

"The IMF team continues discussions with Pakistani authorities with the aim of quickly reaching an agreement on financial support from the IMF," the official said, according to Geo TV.

Nathan's statement came hours after Pakistan Prime Minister Shehbaz Sharif said that Pakistan expects a decision on the IMF stalled bailout programme within a day or two as the struggling country continues to meet the lender's demands.

He also expressed hope after he had a telephone call with Kristalina Georgieva, IMF Managing Director (MD) who was his fourth contact with the lender's boss in six days, as per Geo TV.

However, economists and rating agencies fear that the USD 350 billion economy could default on its foreign debt obligations if it fails to secure the USD 1.1 loan tranche of the Extended Fund Facility (EFF).

Earlier today, Shahbaz Sharif spoke to the IMF chief over the phone after meeting her thrice from Thursday to Saturday on the sidelines of the New Global Financial Pact summit held in Paris, France.

Over his telephone conversation, the IMF chief acknowledged Pakistan's Finance Minister Ishaq Dar and his team's efforts for attempting to revive the loan after policy matters were discussed in Paris.

Moreover, the PM's Office released a statement that the IMF chief and the prime minister discussed matters related to the stalled bailout programme, according to Geo TV.

PM Shehbaz expressed hope that coordination on the points of the bailout programme would lead to a decision from the Washington-based lender in a day or two.

"The prime minister also reiterated his determination to achieve the goals of improving the economic situation through joint efforts," the statement read.

The statement added that while hoping Pakistan's economic situation would improve, the IMF chief appreciated the prime minister's determination.

Finance Minister Ishaq Dar earlier today, said that the government is looking for a mechanism to receive all USD 2.6 billion stalled funds from the IMF.

He said that the nation will soon hear "good news" regarding stalled bailout package as the "next one or two days are important" while speaking on Geo News' Capital Talk programme, reported Geo TV.

"We are trying our best to complete the 9th [IMF] review and the nation will receive good news soon," the finance minister added.

The South Asian nation is going through its worst economic crisis amid record inflation and interest rates, but it has seen prospects for its IMF loan take a positive turn before it expires at the end of the week, according to Geo TV.

However, with the bailout programme set to expire on June 30, the federal government has also revised its FY24 budget. The emendation has hiked policy rates to 22 percent in its desperation to secure the deal which is the key to unlocking other external financings for the cash-strapped nation.