Deadlock between Pakistan and IMF likely to be break as federal government has commenced discussions to fulfil the demands put forth by the International lender, an official announcement regarding the signing of the deal is expected soon, sources.
The development comes after having a meetings between the two sides following Prime Minister Shehbaz Sharif’s huddle with the IMF Managing Director, Kristalina Georgieva, in Paris earlier this week.
The meeting on the sidelines of the Global Financing Summit in Paris came with about a week left before the IMF’s Extended Fund Facility (EFF) agreed in 2019 expires on June 30.
Under the $6.5 billion EFF’s 9th review, concluded earlier this year, Pakistan has been trying to secure $1.1 billion of funding stalled since November.
The sources said that obstacles in the conclusion of the ongoing review have been removed after multiple sessions were held between the two sides during the last three days.
“Discussions and preparation for a new draft continued till today and the two sides have reached a consensus,” the sources said.
Sources revealed that Finance Minister has started reviewing the International Monetary Fund demands in the budget framework and discussions have begun to address the IMF’s concerns before obtaining parliamentary approval for the budget.
Remember that, The IMF funding is critical to unlock other bilateral and multilateral financing.
Islamabad has expressed its frustration over the delay. It argues it has met all the painful fiscal measures the lender requested.
The IMF, however, still has concerns over Pakistan’s external financing gap, foreign exchange market operations and the budget presented earlier this month which it said violated the programme’s objective.
Pakistan had defended the budget but at the same time offered to review it in any further talks with the IMF.