WASHINGTON: The International Monetary Fund (IMF) and Pakistan started virtual negotiations on Monday, with Islamabad seeking a solution that relieves the country’s struggling economy of ever-increasing pressure.
In Islamabad, Finance Secretary Hamed Yaqoob Sheikh told Reuters the “length (of the talks) cannot be confirmed but we intend to wrap these up at the soonest”.
Pakistan undertook rigorous talks with an IMF delegation in Islamabad for ten days, from January 31 to February 9, but no agreement was reached.
The IMF, on the other hand, stated earlier that both parties had committed to staying active and that “virtual conversations would continue in the coming days to complete the implementation specifics” of the measures discussed in Islamabad.
The discussions in Islamabad centered on the ninth review of an IMF Extended Fund Facility (EFF) agreement with Pakistan, which was completed in 2019.
The IMF praised Prime Minister Shehbaz Sharif’s commitment to implementing policies necessary to maintain macroeconomic stability and characterized the conversations as positive.
The IMF also acknowledged that “significant progress… on policy initiatives to alleviate internal and external imbalances” had been accomplished. The Fund emphasized the important targets outlined in Islamabad, which included boosting revenue, cutting unnecessary subsidies, and expanding social safety programmes.
According to diplomatic observers in Washington, the IMF wants Pakistan to begin implementing the proposed measures. According to reports, the IMF statement made following the Islamabad talks emphasized this problem as well.
“Timely and decisive execution of these policies, as well as steadfast financial support from official partners, are crucial for Pakistan to successfully re-establish macroeconomic stability and promote its sustainable development,” the IMF stated.
The ‘official partners’ mentioned in this statement include international financial institutions like the IMF as well as Pakistan’s bilateral partners like China and Saudi Arabia, who, according to sources, are hesitant to offer financial assistance to Pakistan without an IMF package.