Pakistan committed to completing IMF programme – finance minister

2:12 pm Tuesday, December 06th, 2022

(Reuters) -Pakistan is committed to completing the International Monetary Fund programme while meeting external debt repayments on time, the country’s finance minister said on Tuesday during a meeting with the ambassador of its top bilateral lender China.

An IMF review for the release of its next tranche of funding has been pending since September, leaving Pakistan in dire need of external financing.

Pakistan’s finance minister, Ishaq Dar, last week told local television that all targets for the IMF’s ninth review had been completed, and said the IMF was “behaving abnormally” by not completing the review.

“The Finance Minister … apprised the Chinese Ambassador that the Government remains committed to completing the IMF program while meeting all external debt repayments on time,” Pakistan’s finance ministry said in a statement.

In a separate statement on Tuesday, the finance ministry said the IMF programme had come “back on track” and negotiations for the ninth review were at an advanced state.

Pakistan had secured a $6 billion bailout in 2019 under an Extended Fund Facility (EFF), which was topped up with another $1 billion earlier this year.

In his meeting with the Chinese Ambassador, Dar added that Pakistan’s government had a “realistic plan” for dealing with spending required to rehabilitate areas affected by devastating flooding a few months ago. Officials have estimated damage from floods at $40 billion.

Pakistan is facing a widening current account deficit and a balance of payments crisis. Dar last week said Pakistan’s foreign reserves, which have dropped to $7.5 billion, will be shored up with a $3 billion financing from a friendly country in the next two weeks.

The finance ministry said the government had put in place austerity measures aimed at eliminating non-essential expenditure and had been focusing on energy conservation to reduce its import bill.

(Reporting by Charlotte Greenfield, Editing by William Maclean)