The International Monetary Fund has delayed a $6 billion bailout for Pakistan for failing to meet the terms of an earlier deal, officials said Friday, as the country grappled with a worsening economic crisis and a deadly wave of violence.
Pakistani officials said progress had been made to revive the bailout. A critical part of the loan, $1.1 billion, has been on hold since December as officials reviewed the country’s compliance with a 2019 agreement.
The post reflects Pakistan’s struggle for economic stability after summer floods killed 1,739 people, destroyed 2 million homes and caused $30 billion worth of damage. The impoverished country has also been hit by a wave of violence, including a mosque bombing last month in Peshawar that killed 101 people.
Analysts say the revival of the IMF bailout will help Pakistan because the release of the next installment of loans could encourage other international financial institutions to help the Islamic nation.
Prime Minister Shahbaz Sharif blames his predecessor, Imran Khan, now the leader of the opposition, for violating the terms of the 2019 deal. Khan was ousted by a vote of no confidence in parliament in April.
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The IMF has delayed a $6 billion bailout for cash-strapped Pakistan because Pakistan failed to meet the requirements of an earlier deal. (FoxNews)
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Pakistan wants to avoid default but is struggling with depleting foreign exchange reserves, which have fallen below $3 billion. Analysts say that’s enough just to pay for imports for the next two weeks.
The IMF said in a statement that “virtual discussions will continue in the coming days” to advance the deal.
The fund has given new instructions to Pakistan to raise and collect taxes, as well as cut subsidies without burdening the poor, government officials said.
Sharif warned last week that Pakistan would have difficulty meeting IMF conditions.
On Friday, Pakistan’s Finance Minister Ishaq Dar said Pakistan will impose additional taxes of Rs 170 billion and cut subsidies to meet the terms of the deal.
