The International Monetary Fund will hold a crucial round of talks with Pakistan’s newly elected government this week to determine whether the country has met conditions for receiving the much needed final $1.1 billion tranche of a $3 billion bailout, officials said Wednesday.
The five-day talks will begin Thursday in Islamabad with the government of Prime Minister Shehbaz Sharif, whose advisers have hinted that Pakistan will seek a new bailout of up to $8 billion when the current one expires this month.
Pakistan is likely to get the final installment of $1.1 billion from the IMF under the 2023 bailout deal agreed to by both sides last year. It needs the funds to overcome one of the worst economic crises in its history that had raised fears the South Asian Islamic nation could default on the payment of foreign debts.
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In a statement, Pakistan’s Finance Ministry said Pakistan has complied with all of the IMF’s conditions to receive the much-need final installment of $1.1 billion under the bailout which expires this month.
A large Pakistani flag is draped over the side of a building, Lahore, Pakistan, August 12, 2022. (ARIF ALI/AFP via Getty Images)
The ministry said once a staff-level agreement with IMF is reached, the executive board of the global lender will approve the disbursement of the $1.1 billion to Pakistan.
The latest development comes a day after Pakistan’s newly appointed Finance Minister Muhammad Aurangzeb told reporters that Islamabad will seek a new bailout from the IMF when the current one successfully concludes.
Last year’s bailout was signed by Sharif, who replaced former premier Imran Khan after a no-confidence vote in parliament. Sharif was again elected the country’s premier this month after the Feb. 8 parliamentary elections.
The latest development comes days after Khan wrote a letter to the IMF urging it to link any talks with Islamabad to an audit of the recent elections, which his Pakistan Tehreek-e-Insaf party says were rigged. Authorities have dismissed the charge as baseless.
So far, the IMF has not commented on Khan’s letter.
Khan has come under criticism by Sharif’s government for writing the letter, which said it was a bid by Khan to harm the economy. Pakistan narrowly averted a default on foreign payments last summer when the IMF approved the bailout for it following monthslong talks.
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Sharif this week said that his biggest challenge is to overcome the lingering economic crisis.
