Pakistan says final hurdle in IMF deal

ISLAMABAD Pakistan Finance Minister Ishaq Dar said on Thursday that an assurance from friendly countries to fund a balance of payments gap was the last hurdle in the fight to get an IMF deal, which will provide a vital lifeline to prevent an economic meltdown.

Several countries had made commitments to support Pakistan during previous International Monetary Fund IMF reviews, Dar told the country's upper house of parliament, adding that the IMF was now asking for those commitments.

He said that the only delay is that several friendly countries had made commitments to bilaterally support Pakistan at the time of the previous reviews. Pakistan is waiting for a bailout package of $1.1 billion from the IMF, which has been delayed since November due to issues related to fiscal policy adjustments.

The funds are part of a $6.5 billion bailout package approved by the International Monetary Fund in 2019, which analysts say is critical for Pakistan to avoid default on external payments obligations.

The deal will unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves, which have fallen to four weeks worth of import cover.

The International Monetary Fund wants Pakistan to get the assurance of $7 billion to fund this fiscal year's balance of payments gap. Dar has been saying it should be around $5 billion.

Since early February, Islamabad has been hosting the IMF mission to negotiate a series of policy measures for the cash-strapped economy to manage the fiscal deficit ahead of the annual budget around June.

It has been an extensive engagement, unusual, too long, too demanding, but we have completed everything, Dar said.