Prime Minister Shehbaz Sharif announced on Wednesday that Pakistan was close to striking a deal with the International Monetary Fund (IMF) to restart the stalled $1.1 billion loan tranche, which is crucial to avoid a potential default.
Speaking to the federal cabinet in Islamabad, the prime minister said that the IMF program would be revived soon, as only a few outstanding items needed to be implemented.
However, Pakistan has been struggling to meet the IMF’s stringent conditions in order to unlock the next tranche of the loan facility. The IMF has demanded that Pakistan increase its low tax base, remove exemptions for the export sector, and raise artificially low energy prices that are meant to help poor families.
Pakistan is facing an urgent need for funds to address its dire economic crisis, with the State Bank of Pakistan’s foreign exchange reserves covering only about a month’s worth of imports.