Pakistan Prime Minister Shehbaz Sharif on Sunday accused Imran Khan’s Pakistan Tehreek-e-Insaf party of trying to sabotage a deal with the IMF ahead of the Washington-based lender’s crucial board meeting, asserting that self-centred politics will cause huge injustice to the country. The IMF executive board will convene on Monday to decide whether to disburse USD 1.18 billion loan tranche to Pakistan, as the country scrambles to avoid an economic collapse, amid high inflation and dwindling foreign exchange reserves.
“I have never seen such self-centred politics; it will be a huge injustice with Pakistan and a big conspiracy against the country, Sharif said, while referring to the Pakistan Tehreek-e-Insaf party, on his visit to inspect flood victims in Sindh province. On Friday, Khyber Pakhtunkhwa province Finance Minister Taimur Khan Jhagra shot off a sharply-worded letter to his federal counterpart Miftah Ismail, saying it would be next to impossible to run a provincial surplus this year due to the unprecedented floods that have wreaked havoc across the country and unresolved budgetary issues.
The Khyber Pakhtunkhwa province is run by former prime minister Khan’s Pakistan Tehreek-e-Insaf: party. Ensuring surpluses by provinces this year is a key requisite for an IMF bailout package.
Meanwhile, Pakistan government has contacted the IMF and given them a clarification on Jhagra’s letter to Ismail, according to Geo News. The ministry said the IMF agreement would be implemented at all costs and the international lender had responded positively to Pakistan’s explanation, the report said.
The IMF had announced on July 13 a much-awaited staff-level agreement with Pakistan on a nine-month extension in tenor and a USD 1 billion increase in the size of the bailout package to USD 7 billion, including upfront disbursement of about USD 1.18 billion. Its approval from the IMF executive board was, however, linked to a series of prior actions that the government fulfilled over the past two weeks.
Saudi Arabia said it will invest USD 1 billion in Pakistan to support the cash-strapped country’s ailing economy, the Gulf Kingdom’s Foreign Minister Prince Faisal bin Farhan informed his Pakistani counterpart Bilawal Bhutto Zardari during a phone call on Thursday. The original USD 6 billion worth of 39-month Extended Fund Facility (EFF) agreed in 2019 provided to countries facing serious payment imbalances because of structural impediments or slow growth and an inherently weak balance-of-payments position was to end in September this year, but only three tranches of about USD 3 billion could so far be disbursed as the programme suffered repeated breakdowns, according to the Dawn newspaper.
Since Khan’s ouster in April, Pakistan’s currency has plummeted to an all-time low of 240, amid uncertainty about IMF assistance. Earlier this month, New York-based rating agency S&P Global revised Pakistan’s long-term ratings from ‘stable’ to ‘negative’ given the spiralling inflation and tighter global financial conditions.