Still no technical agreement between Pakistan and the International Monetary Fund when the institution’s delegation left. The negotiations relate to the resumption of disbursements by the IMF of a staggered loan of 6.5 billion dollars. “Carry”, in the present, because the dialogue is not broken. Discussions will continue remotely.
Progress described as considerable by the IMF. Progress on policy measures to correct internal and external imbalances.
For its part, the Pakistani executive ensures that the discussions “have been successfully concluded” and that the draft of a memorandum of understanding has been submitted to the government.
In recent weeks, Islamabad had begun to give in to certain IMF demands. For the disbursement of 1.2 billion dollars, the Washington institution asked for an improvement in tax collection, the end of export tax exemptions, and new increases in the cost of energy.
Conditions which, in the eyes of the Pakistani Prime Minister, “ were beyond imagination “. Despite everything, the government has just announced a new 4% increase in the price of gasoline and an increase in taxes.
Additional concession after having already raised the price of gasoline in January and given up its interventions on the foreign exchange market. Delicate political decision as the general elections loom on the horizon and inflation has already exceeded 27% over one year.
But Pakistan is cornered. Its foreign exchange reserves fell below $3 billion. Islamabad has enough to cover less than three weeks of essential imports.
Beyond the payment of the tranche of aid expected by Islamabad, an agreement with the IMF would open other doors for it. This would allow Pakistan to obtain additional aid from Gulf countries or China, or even other multilateral lenders, such as the World Bank.