Pakistan has Reached an Agreement with IMF, Terms Unknown
According to economic analysts, if rulers really want to revive Pakistan's economy, they have to focus on Exports and IT sectors.
The International Monetary Fund (IMF) said in a statement that the loan program with Pakistan has been restored, but on what terms the loan program has been restored, neither Finance Minister Muftah Ismail nor the IMF is saying.
A statement issued by the IMF on Thursday said that an agreement has been reached on Pakistan’s staff level.
According to a spokesman for the IMF, the loan program will pave the way for a $1.17 billion tranche.
However, the spokesman said in a statement that the program was subject to final approval by the IMF’s executive board.
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The spokesman said in a statement that after the approval of the executive board, an installment of $1,177 million would be released, bringing the total payment for the ongoing program to about $4.2 billion.
The spokesman added that in addition to assisting in the implementation of the program in the fiscal year 2023 and meeting the financial needs, discussions on additional financing will continue.
According to the spokesperson, the IMF Board will consider expanding the EFF and increasing its reach by the end of June 2023.
The IMF team, in collaboration with the EFF, will bring the loan program to about $7 billion.
Nathan Porter’s statement
“Pakistan is at a challenging economic juncture,” said Nathan Porter, who led the IMF team. A difficult external environment is linked to its internal policies, which has made domestic demand unbalanced.
Nathan Porter further said that due to inconsistency in economic policies, Pakistan faced huge fiscal and external deficits in FY 2022, which led to rising inflation and a severe blow to foreign exchange reserves.
Comments by economic analysts
Analysts say the IMF has revived Pakistan’s debt program, but Finance Minister Muftah Ismail and IMF spokesmen are reluctant to reveal details on the terms under which the program was revived. When he was in opposition, Imran Khan kept demanding details of the deal with the IMF from the government.
Economic analysts say China has twice gone to the IMF loan program to date, while India last used the IMF bailout package in the 1990s, but India repaid all loans in the early 2000s. Had paid interest.
Economic analysts further say that the IMF imposes strict conditions on the repayment of its loans, but due to the reckless policies of our ruling class, the loans are sacrificed to their interests, even hefty taxes from the people. Inflation is boosted by imposing unnecessary taxes on essential commodities, but at the end of the year, debt remains stagnant and interest rates continue to plummet.
If the current rulers are really sincere with the country, then they have to formulate policies that will put the country’s economy on the right track and make it possible to repay the debt. Otherwise, Qarun’s treasury will be less to revive the economy of Pakistan. We have to bring in capable people who can take this country out of the abyss, the government has to pay special attention to the IT and export sectors.
