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IMF wants Pakistan to ‘do more’ before staff-level agreement

ISLAMABAD, May 13 (DNA): The International Monetary Fund has demanded
Pakistan ‘do more’ before agreeing on the staff-level agreement for
resumption of a billion-dollar loan program.

Despite receiving confirmation from Saudi Arabia and the United Arab
Emirates (UAE), the IMF has now asked Pakistan to arrange $8 billion in
fresh loans to back the external debt repayments during the next seven
months for a successful completion of the long-stalled ninth review
bailout package.

Pakistan has to satisfy the IMF regarding repayment arrangements for
loans worth $8 billion by December 2023. During May and June 2023,
Pakistan has to repay external debt of $3.7 billion.

The IMF sought an assurance for an additional $2.4 billion, sources in
the Finance Ministry said.

Pakistan has to ensure roll-over from China to repay another $2.4
billion in loans, the sources said added. They also said Pakistan had
earlier assured funding of $3 billion from China.

The sources further said funding of $2 billion has also been assured
from Saudi Arabia, and $1 billion from the UAE.

The IMF also expressed dissatisfaction over the collection of petroleum
development levy falling short of target. In nine months, petroleum
development levy of Rs362.48 billion was collected, the Finance Ministry

In the current fiscal year, the overall target for the petroleum
development levy is Rs855 billion.

A staff-level accord to release a $1.1 billion tranche out of a $6.5bn
IMF package has been delayed since November, with nearly 100 days gone
since the last staff-level mission to Pakistan.

Sources say that the IMF has asked Pakistan to arrange $8.4 billion in
fresh loans aimed at ensuring debt repayments for the May-December 2023

The IMF has asked Pakistan to arrange $6 billion in external financing
till June 2023 to avoid default. Due to a delay in arranging these
funds, the 9th programme review worth $1.2 billion remains incomplete.

On Thursday last, Finance Minister Ishaq Dar said that Pakistan will not
make tough decisions on the demand of the International Monetary Fund
(IMF) anymore.

While informally talking to the journalists, Ishaq Dar said that it is
completely up to the International Monetary Fund (IMF) to sign a
staff-level agreement or not.

He clarified that the government will not make tough decisions on IMF’s
demand anymore. “We have already implemented pre-conditions of the IMF
but not anymore.”

In a scheduled press conference on Thursday, IMF spokesperson Julie
Kozack, said Pakistan needed “significant additional financing” to
successfully complete the ninth review. She said the economy was facing
stagflation, had very large financing needs and had also been affected
by a series of shocks, including severe flooding.

It is pertinent to mention here that the United Arab Emirates, Saudi
Arabia and China came to Pakistan’s assistance in March and April with
pledges that would cover some of the funding deficit. DNA

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