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Tuesday, April 16, 2024  
07 Shawwal 1445  

New budget crucial to securing IMF board review

Talks on $1.1billion bailout package have been stalled for months
File photo
File photo

Pakistan stands to secure one board review under the current bailout package of the International Monetary Fund (IMF) if measures in its budget, set to be unveiled on Friday, meet the lender’s expectations, a Fund official said.

The IMF programme runs out this month with about $2.5 billion in funds, under three prior reviews, yet to be released, as Pakistan struggles to strike a deal with the lender while battling record inflation, fiscal imbalances and low reserves.

Passing a budget for fiscal year 2024 that meets program objectives is key to paving the way for a final review under the current bailout, the IMF’s resident representative for Pakistan, Esther Perez Ruiz said.

“The focus of discussions over the FY24 budget is to balance the need to strengthen debt sustainability prospects while creating space to increase social spending,” she told Reuters on Thursday.

“To pave the way for a final review under the current EFF, it is essential to restore the proper functioning of the foreign exchange market,” Ruiz said.

More such spending would defray the impact of inflationary pressures on Pakistan’s most vulnerable, Ruiz added, but it needed more progress to identify spending and revenue-generating measures in order to achieve this.

Pakistan and the IMF have been engaged in budget talks.

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