Pak finance minister flies to Washington for IMF talks on $6 bn package

Pakistan's newly-appointed Finance Minister Miftah Ismail on Thursday left for Washington to meet top IMF officials to renegotiate a USD 6 billion bailout package that was stalled by the previous Imran Khan regime.

Under the agreement signed in 2019, Pakistan would receive USD 6 billion for a period of 39 months, of which it has only received half the amount so far.

Cash-strapped Pakistan is currently waiting on tenterhooks hoping that the international lender would resume talks on its seventh review, which was put on hold due to the political turmoil in the country.

"I am off to Washington DC to try and put back on track our IMF program that PTI (Pakistan Tehreek-e-Insaf) and IK (Imran Khan) derailed, Ismail tweeted before his departure.

The finance minister said the previous government's decision has endangered Pakistan's economy.

The meeting with the IMF officials will also be attended by Pakistan's Central Bank Governor Raza Baqir.

If the seventh review is approved, the IMF will release over USD 900 million, which would be a welcome antidote for the country's sagging economy that is staring at plummeting forex reserves (USD 10.8 billion) and a current account deficit crisis, according to Geo Tv.

The newly-formed Shehbaz Sharif government that took over this month also has to deal with spiralling inflation and an economy that simply refuses to rebound.

In its latest report on Pakistan, IMF has predicted an annual growth of 4 per cent, against the country's central bank's estimates of around 4.8 per cent.

On Wednesday, Ismail in his first press conference as the country's finance minister said that the IMF had put forward a list of demands for the revival of the bailout package to be implemented.

These include withdrawal of fuel subsidy, banishing the tax amnesty scheme, increasing power tariff and imposing additional taxation measures, the Geo TV report said.

The subsidies on fuel and power were implemented by Khan, days before he was ousted from power, the report added.

A rollback would be an arduous task for the present government, especially at a time when Pakistan's consumer inflation clocked at 12.7 per cent for the month of March.

We cannot let our fiscal and external financial position deteriorate further and have our development partners walk out. Tough choices need to be made, Ismail tweeted last week.

After his meeting with IMF officials in Washington, Ismail will be travelling to London to meet Pakistan Muslim League-Nawaz (PML-N) supremo Nawaz Sharif.