Pakistan is committed to completing IMF programme while meeting debt repayments on time: Ishaq Dar

Pakistan is committed to completing the International Monetary Fund (IMF) programme while meeting external debt repayments on time, Finance Minister Ishaq Dar said on Tuesday during a meeting with the ambassador of its top bilateral lender, China.

The country is in desperate need of external financing as the IMF’s review for the disbursement of its next tranche of funding has been on hold since September, according to Reuters.

Ishaq Dar, the finance minister, stated last week on local television that the IMF was “behaving abnormally” by not finishing the ninth review even though all targets had been met.

“The Finance Minister … apprised the Chinese Ambassador that the Government remains committed to completing the IMF program while meeting all external debt repayments on time,” the finance ministry said in a statement.

The IMF programme is “back on track,” according to a separate statement released by the finance ministry on Tuesday, and preparations for the ninth review were well underway.

An Extended Fund Facility (EFF) bailout for Pakistan in 2019 included a $6 billion bailout that was later increased by $1 billion.

Dar said that Pakistan’s government has a “realistic plan” for handling the costs associated with rehabilitating the areas damaged by devastating flooding a few months ago during his meeting with the Chinese Ambassador. Official estimates place the cost of flood damage at $40 billion.

Pakistan is dealing with a balance of payments issue and a growing current account deficit. Dar announced last week that a $3 billion loan from a friendly nation will be used to bolster Pakistan’s foreign reserves, which have fallen to $7.5 billion.

According to the finance ministry, the government has implemented austerity measures to cut non-essential spending and has prioritised energy conservation to lower its import expenses.