Economy

Pakistan grinds its teeth as IMF reads out the riot order

Cash starved Pakistan, which is currently in talks with the International Monetary Fund (IMF) for resumption of the $6.5 billion loan programme has been miffed by the multilateral agency, which is playing tough this time with Islamabad. Though after much mediation, the two have gone back to the drawing board, the IMF’s list of demands required for resumption of the loan has been expanding continuously.

Local newspaper Dawn said that IMF has changed interpretations of at least four prior actions ahead of reaching a staff-level agreement (SLA) on the direly needed economic bailout.

“We are members of the IMF, not beggars or else our membership be discarded,” the newspaper quoted an unnamed official as saying.

Earlier an embarrassed Pakistan Prime Minister Shehbaz Sharif said that his government has had to accept the strict conditions set by the IMF “unwillingly.” His government has also approved a Rs 170 billion mini budget as part of the IMF’s demand for the loan. Islamabad has agreed to impose fresh taxes, end unbudgeted power subsidies, increase gas and petroleum tariffs, among other things.

This would push up inflation further and this is causing more worries for the Shehbaz Sharif government, which will face elections later this year.

Sharif has also come criticism by his own party member. Maryam Nawaz Sharif, his niece and daughter of PML-N supremo Nawaz Sharif, came out strongly opposing his decision to hike taxes, saying that the party supremo was not involved in this decision making.

“This is not my government. Our government will be when Nawaz Sharif returns to Pakistan,” Maryam Sharif said at a youth wing meeting, reported the Express Tribune. She also underlined that only her father could take Pakistan forward.

The loan programme was signed in 2019 by former prime minister and PTI leader Imran Khan. It was stalled after his government failed to adhere to the prescription set by the multilateral agency. While Miftah Ismail, former finance minister under the Sharif government was instrumental in resuming the loan programme, it ran into rough weather after current Finance Minister Ishaq Dar reversed the policies.

However, amid rising debt levels and staring at a default, Dar has now been forced to increase fuel prices.

Meanwhile, amid the deepening crisis, yesterday, global ratings agency Moody’s downgraded Pakistan. The ratings have fallen to Caa3 from Caa1.

Also read: Moody’s downgrades Pakistan’s rating amid depleting forex reserves

Mahua Venkatesh

Mahua Venkatesh specialises in covering economic trends related to India and the world along with developments in South Asia.

Recent Posts

Rising cybercrime: 1.8 million women fall victim in Pakistan

Over the past five years, approximately 1.8 million women in Pakistan have fallen victim to…

13 hours ago

Ashwini Vaishnaw acknowledges states’ role in making electronics India’s second-largest export

Union Minister Ashwini Vaishnaw on Saturday thanked the states for success of the electronic industry,…

14 hours ago

US imposes visa restrictions on officials involved in ‘forced return’ of Uyghurs to China

The United States has announced a new visa restriction policy targeting foreign government officials involved…

15 hours ago

ISIS leader killed in Iraq, Trump says “fugitive leader relentlessly hunted down”

The Iraqi Prime Minister said that personnel of the country's national intelligence service, working with…

15 hours ago

SpaceX, NASA launch mission to bring back astronauts Sunita Williams, Butch Wilmore from ISS

SpaceX and NASA have launched a mission to bring back US astronauts Sunita Williams and…

15 hours ago

PoGB: Protestors cite lack of government dialogue in Diamer-Bhasha dam dispute

The ongoing "Haqooq Do, Dam Banao Tehreek" protest, led by Amir Quaid, entered its 25th…

3 days ago