Pakistan begins talks with IMF amid economic meltdown

Islamabad, May 18, (dpa/GNA) – Pakistan on Wednesday began talks with the International Monetary Fund (IMF) for the revival of the stalled bailout package, as the new government seeks to stabilize a crumbling economy.

The talks are being held in the Qatari capital of Doha for the revival of a $6-billion loan package the country secured in 2019. The programme was suspended three times, with $3 billion released so far.

“Pakistan will not only seek revival but an extension of the bailout package,” a Finance Ministry official told dpa.

The government of Prime Minister Shehbaz Sharif wants the programme ending in September to be extended to $8 billion until June 2023.

Pakistan’s new government took over in April from ousted prime minister Imran Khan and inherited daunting challenges as the fiscal deficit is projected to exceed 10% of gross domestic product (GDP) at the end of the ongoing financial year, which ends on June 30.

However, the government shied away from taking tough decisions, fearing a backlash from the people, particularly from the withdrawal of subsidies on electricity and petroleum products, a precondition set by the IMF.

Amid the government’s indecisiveness and uncertainty, the Pakistani rupee has fallen to an all-time low and hit 199 to the US dollar on Wednesday.

In a bid to control the continuous depreciation of the rupee, the government imposed a ban on the import of non-essential and luxury items, Geo TV reported.

"The government would have to take tough decisions and choose between the economy and politics," said Abid Qayyum Suleri, executive director at Sustainable Development Policy Institute (SDPI).

He said that today's talks would have an impact and help address the uncertainty factor.