Finance ministry says global lender will consider reviving stalled bailout after government has completed ‘prior action’ legislative procedures
Pakistan on Monday announced it has requested the International Monetary Fund (IMF) to delay until the end of January a meeting of its Executive Board that was slated to determine whether or not to revive a suspended loan facility.
“As soon as the legislative procedures are completed, the IMF board will consider it for approval,” read a statement issued by the Ministry of Finance, referring to two pending legislations—a supplementary finance bill and a bill seeking greater autonomy for the State Bank of Pakistan—that the IMF has declared “prior actions” to revive the $6 billion loan facility.
Once the IMF revives the bailout program, it would release a tranche of $1 billion to Pakistan that would help counter the country’s spiraling current account deficit. It would also pave the way for Islamabad to avail additional financing from lenders such as the Asian Development Bank and the World Bank, as well as grants and similar aid.
While the Pakistan Tehreek-e-Insaf (PTI)-led government has repeatedly claimed it would get the “mini-budget” passed without hindrance within this month, opposition parties have declared it an “attack” on the country’s economic sovereignty and vowed to block its passage.
The IMF Executive Board was initially slated to meet on Jan. 12 to complete the sixth review of the three-year loan program. With the delay requested by Pakistan, it is as yet unclear when the global lender would approve the sixth review of the Extended Fund Facility.