On Friday, May 26, Shehbaz Sharif, Pakistan’s prime minister, stated that an agreement with the International Monetary Fund (IMF) has not been reached, but that China’s backing will be critical in keeping the country from default.
PM Sharif stated in his address to industrialists and businesses in Karachi that Pakistan has ‘successfully fulfilled all of the rigorous conditions imposed by the International Monetary Fund (IMF)’, underscoring the government’s commitment to complete the IMF programme.
Lauding China, Shehbaz Sharif stated that China has shown its support for Pakistan’s growth by rolling over its commercial debt. It is notable that in March this year, China rolled over a $2 billion loan to protect Pakistan from an economic collapse.
“In the understanding of our Ministry of Finance, the gap in IMF conditions was of x amount but for them (IMF) it was x+1, but even that gap was filled with the help of our ‘dost mumalik’ (friendly nation) China. As I speak, it is done and only some paperwork is left,” Sharif said.
He further added that China also rolled over commercial loans of over $1.3 billion for Pakistan.
“They completed all the procedures for these rollovers two or three months ago. I have not seen such friendship and brotherhood,” Sharif said.
He went on to say that Pakistan draws positive sentiments from friendly nations, demonstrating a shared desire to see the country flourish.
The Pakistani Prime Minister did not miss the opportunity to attack former Prime Minister Imran Khan and his government, pointing out that the previous government had flouted the IMF agreement.
“You all know that the previous government violated the IMF agreement,” PM Sharif said.
For the past year, the country has been plagued by political uncertainty, which has continued even now. This prevailing instability caused price rises, worsening the problem of inflation.
The Pakistani PM also emphasised the importance of investors willing to take risks and invest in Pakistan, referring to them as ambassadors for the country.
Meanwhile, Pakistan has also sought US intervention for the completion of the IMF bailout programme, as it has requested the US to convince IMF to strike the staff-level agreement which earlier could not be reached.
According to Pakistani media reports, finance minister Ishaq Dar informed the US envoy that the current Extended Fund Facility (EFF) arrangement would expire on June 30, 2023. Consequently, the IMF would have to make a decision to complete the pending 9th Review under the EFF programme.
