An inquiry for comment from Reuters was not immediately answered by the finance ministry.
The IMF stated last week that Pakistan’s prompt completion of its flood recovery plan is crucial to enable negotiations and ongoing financial support from multilateral and bilateral partners on Wednesday.
When Pakistan was devastated by floods earlier this year, the country was already dealing with a full-blown economic crisis that included decades-high inflation and diminishing foreign exchange reserves. In 2019, it had signed up for a $6 billion IMF bailout programme; the ninth review is presently ongoing.
In a letter to Reuters, IMF resident representative Esther Perez Ruiz stated that “the prompt finalisation of the recovery plan is vital to assist the negotiations, together with continuous financial support from multilateral and bilateral partners.”
IMF requests that Pakistan cut costs
She continued by saying that IMF staff members are still in talks with Pakistani authorities on how to refocus and better target aid toward humanitarian needs while pushing reform initiatives to maintain economic and budgetary sustainability.
More than 1,700 people were killed and billions of dollars in damage by devastating floods. The damage has been estimated to have cost between $10 billion and $40 billion by Pakistani authorities.
As part of the ninth review of the programme, the finance ministry of Pakistan stated last week that it will “expeditiously” complete the technical engagement with the IMF. However, a concrete timetable for the review’s conclusion has not yet been revealed.
The money will provide the South Asian country with a lifeline as it struggles to persuade foreign markets and rating agencies that it has the resources to cover its external finance needs, including debt repayment.
Early in the following month, Pakistan must return a $1 billion international bond. As of the previous week, the country had $7.9 billion in total foreign reserves with the central bank.
