Dar apprises US envoy about progress on IMF talks as deadline looms

H.E. Mr. Donald Blome, Ambassador of the United States of America to Pakistan called on Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar,at Finance Division in Islamabad on June 21, 2023.

ISLAMABAD, JUN 21: Finance Minister Ishaq Dar met US Ambassador to Pakistan Donald Blome on Wednesday and informed him about the progress on the ongoing talks with International Monetary Fund (IMF), conveying his government’s commitment to complete the programme with the lender, a statement issued by the Ministry of Finance said.

Dar’s meeting with the US envoy comes as Pakistan’s ninth review by the IMF under the 2019 Extended Fund Facility (EFF) for the release of $1.2 billion remains pending with less than 10 days remaining till the programme’s expiry on June 30.

Last week, the IMF had raised several issues with Pakistan’s budget for fiscal year 2024, saying that some of the proposed measures went against the EFF programme’s conditionality.

Esther Perez Ruiz, IMF representative for Pakistan, had earlier said Pakistan needed to satisfy the IMF on three counts, including the budget for the upcoming fiscal year, before its board will review whether to release the pending tranche.

With the programme’s expiry just days away and the IMF seemingly unconvinced with the budget, fears that the deal will not materialise have soared.

For its part, the government responded to the IMF’s concerns, saying that it was “flexible” on the budget and remained engaged with the international lender to reach an “amicable solution”.

With reserves at critical levels for the past several months, Pakistan is in dire need of an IMF bailout, without which it may default.

The country was expected to get around $1.2 billion from the lender in October last year as part of the EFF’s ninth review. But almost 8 months later, that tranche has not materialised as the IMF says Pakistan has been unable to meet important prerequisites.

Because of this delay, the programme’s tenth review, which was originally part of the plan, is all but out of question.

In his meeting with Blome today, Dar also informed the US ambassador about his government’s budgetary measures to reduce the fiscal gap in order to meet its national as well as international financial obligations, according to the statement.

He shared the economic policies and priorities of the government to address the challenging economic environment and set the economy on the path to stability and growth, it added.

“The two sides also exchanged views about areas of common interest and how the existing bilateral relations between the two countries can be enhanced further.”

The statement said Ambassador Blome “expressed confidence in the policies and programmes of the government for economic sustainability and socio-economic uplift of the masses” and “extended his support to further promote bilateral economic, investment and trade relations between both the countries”.