Pakistan to seek larger bailout package of over $8 billion from IMF

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NEW DELHI: Cash-strapped Pakistan is planning to make a formal bailout package request to the International Monetary Fund (IMF) under the Extended Fund Facility (EFF), which facilitates a longer and larger package.
According to reports, Islamabad is likely to seek a package of over 8 billion US dollars during the upcoming spring meetings of Bretton Woods Institutions, known as the IMF/World Bank, scheduled to be held in Washington, DC, from April 15 to 20.
Pakistan finance minister Muhammad Aurangzeb would reportedly lead a delegation comprising finance secretary Imdadullah Bosal, secretary EAD Kazim Niaz and governor State Bank of Pakistan Jamil Ahmed to the meetings.
It is expected that Pakistan, which has been in economically bad shape for years, may request for enhanced quota like it did in 2008 when it secured 700 per cent of its quota during the Pakistan Peoples Party (PPP) government.
The other possibility is to augment the EFF through a climate finance instrument, as Pakistan qualifies for it due to the worst climate degradation in the last few years.
According to the sources, the IMF’s review mission is in Pakistan for the completion of the second review under the $3 billion standby arrangement (SBA) programme and the release of the third and last tranche of USD 1.1 billion. However, discussions are being held on the larger EFF programme, news agency ANI reported citing Geo News.
Earlier, the Pakistan government informed the IMF not to allocate an additional budget for the China-Pakistan Economic Corridor (CPEC). Islamabad has said that it will not be setting aside extra funds to clear the outstanding dues of Chinese power plants.
The IMF has raised concerns about the effectiveness of Pakistan’s efforts to curb electricity theft. Officials from the ministry of energy disclosed that the IMF had inquired about the government’s plans regarding funds for Chinese power plants, beyond the allocated PKR 48 billion for the current fiscal year.
They clarified that there are no intentions to approve additional funds to settle the debts of Chinese power plants. The outstanding dues of CPEC power projects have surged to a staggering PKR 493 billion or $1.8 billion by the end of January 2024, marking a significant increase from the previous year.
(With ANI inputs)



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