Pakistan has no choice but to accept IMF terms, PM says

Pakistani Prime Minister Shehbaz Sharif at the European headquarters of the UN in Geneva on January 9, 2023. AP - Salvatore Di Nolfi

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Pakistan will have no choice but to accept the conditions set by the International Monetary Fund (IMF) for the release of much-needed financial aid, even if they " 

beyond the imagination

 ", announced on Friday February 3 , Pakistani Prime Minister Shehbaz Sharif.

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An IMF delegation arrived in Islamabad on Tuesday to negotiate the disbursement of a new tranche of financial aid, under a program suspended for months.

The Pakistani government has done everything to avoid the bitter potion of the IMF - which called for the end of subsidies to the energy sector and interventions in the foreign exchange market, as well as the increase in taxes -, for fear of paying the prize at the ballot box during the legislative elections at the end of the year.

But he finally had to face the facts.

“

 I'm not going to go into details, but simply say that our economic challenge is unimaginable.

The IMF conditions that we are going to have to accept are beyond imagination.

But we will have to accept them  ,”

Shehbaz Sharif

told

television from the city of Peshawar.

The economy of the world's fifth most populous country has collapsed alongside a latent political crisis, with a falling rupee and inflation hitting levels not seen in decades, as well as recurring difficulties in repaying its huge debt. .

Last summer's devastating floods

and a major energy shortage have added to the pressure.

Galloping inflation and plummeting foreign exchange reserves

In January, the rise in prices reached 27.55% year on year, according to the statistics office, a high not seen since May 1975. On Thursday, the central bank of Pakistan announced that its foreign exchange reserves had fallen further, reaching 3 .1 billion, barely enough to cover 18 days of imports, according to analysts.

For months, Shehbaz Sharif refused to comply with IMF demands, turning to friendly Gulf countries or China for loans on better terms.

But the few new aids and payment facilities obtained have proved insufficient.

And faced with the risk that Pakistan could find itself in default, it ended up yielding under the pressure.

The government finally agreed to let the market set the rupee freely, causing it to plunge last week to an all-time low against the dollar.

Then he raised the price of gasoline, at the risk of further alienating voters.

Concessions that made possible the visit of the IMF.

Discussions with the institution relate to the resumption of payments of a staggered loan of $ 6 billion, granted in 2019 and later increased to 6.5 billion.

Only half of this sum has been paid so far.

(

With

AFP)

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