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Shahbaz Sharif’s demand to IMF chief to end deadlock

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Shahbaz Sharif's demand to IMF chief to end deadlock

Prime Minister Shehbaz Sharif has contacted IMF Managing Director Kristalina Georgieva and requested her to play a role in ending the deadlock in IMF program maintenance.

The negotiations of the Ministry of Finance with the IMF for the last 4 months have not been fruitful, after which the Prime Minister himself has intervened in the matter as a last ditch effort to restore the bailout package of 6.5 billion dollars and foreign funding.

In the past, the Prime Minister had called Kristalina Georgieva to appeal for her intervention to start review talks, after which talks began in February this year.
According to the sources, the prime minister considers the IMF as the last resort to avoid default, that’s why he decided to contact himself. This conversation between Shehbaz Sharif and Kristalina took place on Saturday, after which the prime minister presented the upcoming budget to the finance ministry. Directed to share details with IMF. The finance ministry was earlier reluctant to disclose these details to the IMF.

According to the sources, the prime minister informed the IMF chief that Pakistan has fulfilled all the conditions agreed in February, so now the staff level agreement should be announced. The IMF MD demanded to provide details of the new budget after which it was agreed between the two leaders that Pakistan would provide the budget details to the IMF.
Earlier, the finance ministry had refused to give these details to the IMF on the grounds that the ninth review is for the period of July to September 2022 and in such a case the demand for details of the upcoming budget is unjustified. A senior government official said that a staff-level agreement is possible if the budget details are in line with the monetary framework set by the IMF.
According to initial reports, the proposed budget is extensive and needs to be cut to meet the IMF’s demand.

According to the sources, the Prime Minister has established seven committees to make the proposed budget according to political priorities, in which the committee headed by Khawaja Asif will give suggestions regarding salary, pension increase and subsidies. The IMF had asked Pakistan to manage $6 billion in loans by June, but Pakistan has received assurances of $3 billion from Saudi Arabia and the United Arab Emirates.

Differences with the IMF also persist over the issue of the current account deficit, and the International Monetary Fund has not accepted the government’s revised estimate of a $4 billion to $4.5 billion deficit.

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