The staff level agreement (SLA) between Pakistan and the International Monetary Fund (IMF) has been delayed yet again with the lender issuing its schedule of executive board meetings in which Pakistan hasn’t been included in any agenda until May 17, 2023.
Well-informed sources told ProPakistani that the IMF is dissatisfied with Islamabad’s progress in securing assurances on external financing from friendly nations and further demanded that the local authorities present a definitive repayment plan for the $3.7 million debt maturing in May-June 2023.
The lender has further urged Pakistan to solicit additional backing from friendly nations in order to repay the $3.7 billion loan.
Sources said Pakistan presented a new plan for the financing of $1 billion in additional aid, which the lender deemed insufficient. The IMF has also rejected Islamabad’s proposal to improve its import cover to at least 2 months. Pertinently, the amount of foreign exchange reserves equivalent to two months of imports is $11-12 billion.
Sources from the Ministry of Finance said Pakistan has completed almost all of the prior actions for completion of the 9th review. They said the present government imposed Rs. 170 billion in additional taxes to complete the lender’s program and receive over $1.1 billion in the bailout.
Sources added the highly-awaited SLA was scheduled for February 9 but has faced many delays since then.
Pakistan’s Agenda Missing from IMF Schedule
Sources confirmed that Pakistan is not included in any agenda of the upcoming meetings of the IMF Executive Board, casting further doubt on the lender’s intentions for disbursing roughly $1.1 billion under its Extended Fund Facility for the cash-strapped economy.
They said without the SLA, Pakistan will not receive any funding from international financial institutions.
The budget exercise for the fiscal year 2023-24 is also likely to be severely affected if Pakistan fails to resolve its issues with the IMF, they added.
In an official response on the looming debt repayment schedule till June 2023, the Ministry of Finance stated,
The media has carried a news that 3.7 billion dollar has to be repaid by GoP by the end of June, 2023, which is correct. However, this should not be any cause of concern as arrangements have been made for the rollover/repayment of this debt. It may also be noted that during this period significant inflows are also in the pipeline. The coalition government has averted the default and the economy is now on a course to stability and growth.
