Pakistan PM Sharif says government will agree to ‘stringent’ conditions by IMF for revival of loan program

Addressing the ‘PM Youth Loan Scheme for Business and Agriculture’ on Tuesday (January 24), Pakistan’s Prime Minister Shehbaz Sharif said that the government is ready to swallow the bitter pill of the International Monetary Fund’s (IMF) “stringent” conditions to revive the loan program, as per a report by the Dawn. This comes as at least six million people in the cash-strapped country continue to grapple with the food crisis. 

“We are ready and want to sit down regarding your (IMF’s) conditions so that (the review) can be concluded and Pakistan moves forward”, said Sharif, as per the Dawn. He added, “I spoke to the IMF managing director two weeks ago and we have proactively approached them…so that the programme moves forward, in addition to other multilateral and bilateral programmes.” 

The Pakistan PM said that he clearly conveyed intentions to complete the ninth review to the IMF. Sharif also said that Pakistan has been given a clear message “from left and right” that it would not be abandoned, but it should “stitch” the IMF programme. 

This is apparently in reference to reports that friendly nations and other global lenders are looking at the fate of the IMF programme to determine if they want to provide financial aid to the Pakistan. 

Notably, last year, Islamabad managed to revive the previously stalled $6 billion IMF programme. Amid the worsening economic crisis, Pakistan is also scrambling to complete its IMF review which is reportedly pending since September 2022 after which they would receive some funds. 

However, reports suggest that conditions by the global lender like withdrawal of electricity subsidies, rationalising of gas tariffs in line with prices in the international market, market-determined exchange rate and removal of the ban on the opening of letters of credit (LCs) had previously stalled the efforts to procure the loan. 

Earlier this month, Pakistan’s government was forced to order the closure of malls at 8:30 pm for energy conservation. In his speech, on Tuesday, Sharif also urged the citizens to conserve water, gas, and electricity which would help the government to significantly decrease its import bills. He noted that Islamabad spent $27 billion to import oil for energy generation.

(With inputs from agencies)  

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