The International Monetary Fund (IMF) could delay the new $7 billion bailout if Pakistan fails to secure a $2 billion financing gap from commercial lenders by the end of the current week.
Pakistan must submit a signed Letter of Intent (LoI) to the IMF Executive Board for approval of the 37-month Extended Fund Facility (EFF) while committing to comply with all conditions set by the Washington-based lender, reported a national daily.
Till September 18, 2024, Pakistan is not on the Board’s agenda. Meanwhile, it has so far failed to secure financing commitments from key lending partners. If the financing is not confirmed this week, the approval for the loan may be jeopardized.
A delay into October could lead to the IMF recommending a mini-budget if fiscal slippages occur. This is due to potential shortfalls in tax and non-tax revenue collections. The Federal Board of Revenue (FBR) anticipates a revenue shortfall of Rs. 200-220 billion for the July-September quarter, with final estimates expected between September 18 and 20.
In response to the economic strain, the Ministry of Finance hopes the upcoming Monetary Policy Committee (MPC) meeting on September 12, 2024, may result in a policy rate cut of 150-200 basis points and ease expenditure pressures.
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