IMF delays $6B bailout for cash-strapped Pakistan
The pavilion reflects Pakistan’s struggle to stabilize its economy after summer floods killed 1,739 people, destroyed 2 million homes and caused $30 billion in damage. The impoverished country has also suffered a wave of violence, including last month’s church bombing in Peshawar that killed 101 people.
Analysts say the restoration of the IMF bailout will help Pakistan as the next loan disbursement could encourage other international financial institutions to help the Muslim country.
Prime Minister Shahbaz Sharif blamed his predecessor Imran Khan, now the leader of the opposition, for violating the terms of the 2019 agreement. Khan was ousted through a vote of no confidence in the country. meeting in April.
Pakistan wants to avoid default, but it is grappling with the depletion of its foreign exchange reserves, which have fallen below $3 billion. That amount is just enough to pay for imports for the next two weeks, analysts say.
The IMF said in a statement that “online discussions will continue in the coming days” to make progress on the agreement.
Government officials say the fund has introduced new guidance for Pakistan to raise and collect taxes and cut subsidies without burdening the poor.
Sharif last week warned that Pakistan would have difficulty complying with the IMF’s conditions.
On Friday, Pakistan’s Finance Minister Ishaq Dar said Pakistan would impose an additional tax of 170 billion rupees and cut subsidies to meet the terms of the deal.
Associated Press writer Jon Gambrell contributed to this story from Dubai.