ISLAMABAD: According to sources on Thursday, the government of Pakistan will not extend the existing International Monetary Fund (IMF) program, which is slated to expire on June 30.
Pakistan aims to receive a new IMF bailout.
The Ministry of Finance has been preparing to seek a new IMF package in August.
According to sources, Special Assistant Tariq Bajwa and the Secretary of Finance are working on a proposal to seek a new IMF loan package.
“There will be an imminent threat of default if Pakistan does not materialize a new loan package with the IMF,” sources stated.
“Pakistan must repay nine to eleven billion dollars in international payments by December of this year,” according to sources.
According to insiders, “the country is on track to make payments totaling 22 to 24 billion dollars in the next fiscal year’s budget.”
According to finance ministry sources, the new credit package will be more stringent than the existing bailout. “The new bailout program will be for more than three years,” insiders added.
According to reports, Pakistan’s Prime Minister Shehbaz Sharif told the fund’s Managing Director Kristalina Georgieva of the country’s plan to seek a second bailout.
During a phone call with the IMF managing director over the weekend, the prime minister indicated Pakistan’s plan to sign a follow-up rescue agreement.
Pakistan’s present $6.5 billion initiative has been halted, and efforts to restart it during the last seven months have failed.