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Pakistan pins hopes on crucial IMF talks for revival of EFF programme

Prime Minster Shehbaz Sharif on Sunday had an important telephonic conversation with IMF Managing Director Kristalina Georgieva, held on request from Islamabad…writes Hamza Ameer

Pakistans economic woes continue to worsen with each passing day, as the realiaation of immediate and urgent revival of the stalled International Monetary Fund (IMF) Extended Funding Facility (EFF) is the only way out to counter an economic meltdown and default.

The country’s failure to get financial support from global lenders, coupled with the dangerous fall in its credit ratings has made the upcoming talks with the IMF even more crucial.

Prime Minster Shehbaz Sharif on Sunday had an important telephonic conversation with IMF Managing Director Kristalina Georgieva, held on request from Islamabad.

Reports say Sharif called on the IMF MD to re-consider and review the release of the next tranche and approval of the ninth review as the country is in dire need and desperate to stay in the IMF programme, which is directly linked to release of over $30 billion funding from other global lenders and countries.

But with sharing concerns over country’s financial woes, the Prime Minister’s Office (PMO) stated that the telephonic contact between the Sharif and Georgieva was held on IMF’s request.

However, the PMO’s claim was rejected by the IMF.

“The call was initiated at the request of the Prime Minister of Pakistan to discuss the International Conference on resilient Pakistan,” said Esther Perez, the Resident Representative of the IMF, in a statement.

The statement contradicts to what Sharif was quoted as stating during his speech in Hazara on Sunday, in which, the PMO maintained “the IMF Managing Director called Premier Shehbaz on the phone”.

Experts maintain that the current government of Pakistan still does not seem to be ready to mend its ways and continues to claim strength despite looming and severing risks of sovereign default.

Currently, Pakistan has only $4.5 billion in foreign exchange reserves, which are not enough to even handle three weeks of imports moving forward.

Moreover, Pakistan’s debt repayments (January to March 2023) stand at $8.5 billion, including $2 billion to the United Arab Emirates (UAE), which is believed to be rolled over through the important visit of the Chief of Army Staff. General Asim Munir, who will later be joined by Sharif in the coming days.

But factually incorrect assertions by the PMO in related to the IMF would only result counter-productive and further damage the already deteriorated trust levels with the IMF.

“Pakistan has been in difficult relationships with the IMF due to its habit of making promises at the time of getting a loan tranche, but then abandoning those promises once the tranche was disbursed. This had created wide gulf between the two sides,” maintained economist Shahbaz Rana

Sharif is hopeful that the IMF team would visit Pakistan in the coming days, resulting in revival of the IMF EFF programme, approval of the ninth review and release of the halted tranche to Pakistan.

But with the Finance Ministry not confirming the Prime Minister’s claim and giving no specific dates of the IMF review mission, it is feared that the claim may just be another tall claim of strength, given in ignorance of how dire the country’s financial stands.

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