Delay in IMF programme ‘unprecedented’, says Dar

Federal Minister for Finance Ishaq Dar on Saturday said the persistent delay in resumption of the International Monetary Fund (IMF) programme is “unprecedented”, a remark that comes as Pakistan stays in wait for completion of the ninth review of the bailout since November last year.

“There is no technical reason for the delay (in the resumption of the IMF programme), which is unprecedented. We are the only one (PML-N) in Pakistan’s history that successfully completed the IMF programme of 2013-16,” said Dar while talking to a delegation from the Karachi Chamber of Commerce & Industry (KCCI) on budget proposals at the Federal Board of Revenue (FBR) headquarters in Islamabad.

Pakistan’s bailout programme with the IMF has been stalled at the ninth review, while talks on the staff-level agreement have dragged on over securing necessary financing assurances to bridge the balance of payments gap.

Minister of State for Finance Aisha Ghaus Pasha said on Thursday that the delay is because the IMF not ready to reduce the external financing requirement to $3 billion, categorically stating that there is no Plan-B (without the programme).

Dar on Saturday also said the government has implemented the “most difficult” economic reforms while reiterating that the country would not default.

“Our first priority is there is no delay in the country’s sovereign commitments. Fortunately, there have been no such delays,” said Dar.

The finance minister also slammed “pseudo-intellectuals” who have predicted Pakistan will default. “Some people wish the country to default, but that will not be the case,” he said.

“I assure you: Pakistan is a sovereign country, with trillions of dollars in assets in comparison to $100 billion external debt. Our gas pipeline infrastructure alone is worth $40 billion to $50 billion i.e. 50% of the debt,” he added.

He said that weeks ago, Managing Director IMF Kristalina Georgieva stated that Pakistan will not default.

“I want to reassure you that our economic team remains committed to getting the country out of the current crisis, we will be coming up with new ideas in weeks to come,” said Dar.

The finance minister said that after the budget, which is set to be announced on 9 June, “steps will be taken for the long-term development of the country.”

“We will bring an agricultural revolution in Pakistan, and a sovereign wealth fund will be set up in the country,” he said.

Budget proposals: KCCI for adopting ‘novel’ approaches to economic challenge

He told the KCCI delegation that the government will look into the reasonable demands of the chamber.

IMF programme

Earlier this week, the IMF said it is continuing engagement with the Pakistani authorities – focusing on the restoration of foreign exchange proper market functioning, the passage of a fiscal year 2024 budget consistent with program goals, and adequate financing – to pave the way for a Board meeting before the current program expires at June-end.

This was stated by Nathan Porter, IMF Mission Chief to Pakistan.

He further stated that overcoming the present economic and financial challenges would require sustained policy efforts and reforms for Pakistan to regain strong and inclusive private-led growth.

Meeting with businessmen at PSX

Separately, in a meeting with the business community at the Pakistan Stock Exchange, the finance minister said reforms are always painful and difficult.

“We worked for the betterment of the economy and saved Pakistan from default at a political loss,” he said, and asked for budget recommendations keeping in view the earnings of Pakistan.

“Together we will escape this crisis. I aspire to add Pakistan to the top 20 economies of the world.”