PM Shehbaz Sharif says Pakistan could receive $2-bn bailout from IMF

Pakistan could get a bailout of USD 2 billion from the International Monetary Fund (IMF), Prime Minister Shehbaz Sharif said on Tuesday.

Quoting the finance minister, Sharif confirmed that Pakistan had also received the Memorandum of Economic and Financial Policies (MEFP) from the IMF for the seventh and eighth reviews.

"Miftah Ismail relayed a message in the morning saying that we will hopefully be receiving not USD 1 billion from the IMF, but USD 2 billion. I replied by saying that our real goal is [achieving] self-reliance. Easier said than done," Dawn newspaper quoted the premier as saying while addressing the 'Turnaround Pakistan' conference organised by the Ministry of Planning and Development.

This is a critical development signalling that the two sides have reached an agreement. The draft MEFP is a prerequisite to paving the way towards striking a staff-level agreement.

Now that Islamabad has received the MEFP, which is considered as the crux of decisions negotiated between Pakistan and the IMF because it includes policy actions and structural benchmarks the two sides agreed on, the document will be analysed and scrutinised for three days by the country's economic team.

The premier stressed the need for all quarters to work together for the country's progress as well as the need for self-reliance. Self-reliance guarantees political and economic independence, he added.

Ismail also confirmed on Twitter that Pakistan had received the MEFP from the IMF for the seventh and eighth reviews.

After scrutiny by the country's economic team, the document will then be signed by the finance minister and State Bank of Pakistan governor if no major problem is found.

The staff-level agreement will then be presented before the IMF's Executive Board next month for approval, after which the tranche will be released.

Earlier, sources had said Pakistan reached the accord with IMF with the "help" of the US as Islamabad made major progress on the discussions held with the lender regarding the federal budget for fiscal year 2022-23.

According to Geo News Pakistan, Islamabad did benefit from reaching out to the US because the IMF's attitude earlier was very rigid and the Fund was putting harsh conditions and probably would have refused to close a deal with the country.

Pakistani authorities last Tuesday said the IMF evolved a broader agreement on budget 2022-23 to revise upward the Federal Board of Revenue's target and slash expenditures to achieve a revenue surplus in the next fiscal year.

The next day, IMF Resident Representative to Pakistan Esther Perez Ruiz said that discussions between the Fund and Pakistan were underway and major progress had been made regarding the budget.