More information about Pakistan’s budget is required by the International Monetary Fund.

World News

Islamabad: The International Monetary Fund (IMF) asked Pakistan for more budgetary details prior to the start of the virtual negotiations since Pakistan urgently needs to secure USD 10 billion in foreign loans, according to Geo News.

According to a government official, the postponed IMF programme makes it impossible to raise the $8 to $10 billion in external funding needed to manage the current account deficit and the remaining loan repayment obligations.

In the meantime, the government is prepared to present its strategy to eliminate the circular debt of the gas industry before the upcoming federal cabinet meeting by raising gas prices and making adjustments to the current slabs to satisfy the IMF requirement.

The IMF is currently Pakistan’s only access point for solving its financial crisis-related issues. Earlier, Pakistan shared the contours of areas for executing the pending 9th review under the USD 7 billion Extended Fund Facility (EFF).

However, Pakistan faces a serious short-term issue as Islamabad must acquire new loans totaling USD 10 billion in the next five months (Feb.-Jun.) in order to avoid default, according to a report from Geo News.

In light of this, the administration requested the IMF to revive the programme that has been halted since last November by sending them an SOS (Save Our Soul) letter. Since then, the nation has been heading toward the verge of a complete economic collapse.

In spite of the policy-induced narrowing in the current account deficit during the first half of FY23, the State Bank of Pakistan (SBP) acknowledged in its most recent monetary policy that short-term difficulties for the external sector had increased.

According to a source speaking to The News on Monday, “The fresh borrowing requirements of USD 8 to USD 10 billion cannot be managed without approval of the revival of the IMF plan.”

Official records show that Pakistan was obligated to

Currently, the remaining payback obligation for the second half (Jan-June) of the current fiscal year is USD 8 billion. According to Geo News, the government has a promise to receive a rollover of USD 3 billion from the bilateral creditor in March 2023.

According to the official, “On the repayment of external debt, there is the exposure of USD 5 billion that has so far remained unfulfilled, raising exposure and danger for the government.”

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