Pakistan Seeks IMF Bailout Ahead of Spring Meetings

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Asif Iqbal | April 10, 2024 | 09:18 PM IST | Asia, Pakistan News, World | Follow on Google News

Pakistan Seeks IMF Bailout Ahead of Spring Meetings

Pakistan Seeks IMF Bailout Ahead of Spring Meetings

Pakistan has made the decision to formally approach the International Monetary Fund (IMF) for the medium-term Extended Fund Facility (EFF) during the upcoming annual spring meetings of the Bretton Wood Institutions (BWIs), as reported by Geo News.

Pakistan Seeks IMF Bailout:Seeking Support Through Climate Finance

With the augmentation of the next bailout package through climate finance, Pakistan has made this decision. The size and duration of the upcoming bailout package will be worked out by the IMF’s review mission, expected to start probably in the first week of May to finalize the major contours of the upcoming bailout package.

“We are all set to make a formal request to IMF during the upcoming annual spring meetings of BWIs known as the IMF and World Bank from April 15 to 20, 2024, in Washington, DC, as Pakistan’s delegation led by the minister for finance will attend it,” top official sources of Pakistan said, Geo News reported. The sources further said that Pakistan decided to request for augmenting the Extended Fund Facility through climate finance, so there was a possibility of securing a USD 6 to USD 8 billion-sized program.

“We are going to present our argument before the IMF management that Pakistan faced severe consequences of climate degradation and deserved support from the international community and donor agencies,” sources added.

Reportedly, Islamabad will support the EFF with the possibility of augmenting through climate finance. Meanwhile, Mohammad Al-Qahtani, CEO of Saudi Arabia Holding Company, stated that Pakistan and Saudi Arabia have accelerated the implementation of a massive USD 5 billion investment plan, Geo News reported. Following the visit of Prime Minister Shehbaz Sharif to Saudi Arabia and his meeting with Crown Prince Mohammed Bin Salman, the two countries agreed to expedite the implementation of a massive investment plan worth USD 5 billion.

The agreements included increasing the Saudi deposits in the State Bank of Pakistan from USD 3 billion to USD 5 billion and injecting investments into a new oil refinery and copper mines.

Moreover, these steps are part of a broader agreement that was reached previously, where Saudi Arabia is in talks to invest USD 21 billion in Pakistan.

This includes establishing a copper mine at USD 7 billion and an oil refinery at USD 14 billion.

The investments come at a time when Pakistan is crippled by severe economic crisis, high inflation rates and a shortage of foreign currency.

Pakistan hoped that these investments would help improve its economy and create new job opportunities, reported Geo News. According to the sources, there was one IMF instrument under the Resilience and Sustainability Facility (RSF), which provided affordable long-term financing to countries undertaking reforms to reduce risks to prospective balance of payments stability, including those related to climate change and pandemic preparedness.

Pakistan’s total public debt has been projected to rise to Rs 120 trillion over the medium term, as projected by the IMF over the next three to five-year period.

Asif Iqbal

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