Islamabad: The State Bank of Pakistan (SBP) has expressed hope that the International Monetary Fund (IMF) will consider the prevailing economic challenges and crisis triggered by the recent catastrophic floods and would provide relief in its present conditions and terms, paving way for Islamabad to receive about $4 billion from various global creditors.
The central bank also highlighted that the country has already made payments of $4.6 billion in foreign debts, which it says will be significant in establishing Islamabad’s intent and credibility as it works towards establishing its case in front of the IMF during the upcoming review of the bailout programme.
“The IMF programme was on track and the central bank had fully complied with the targets up till September 2022,” SBP Governor Jameel Ahmed said.
“We are hopeful that this will help in attaining a positive outcome with reconsideration of the conditions post floods in the next review.”
Foreign Minister Bilawal Bhutto Zardari has repeatedly stated in interviews and at global platforms that the devastation caused by the floods since mid-June has also washed away with it, the country’s economic capability to meet up with the demands and terms of the IMF.
Bilawal said that the floods have caused over $40 billion of losses with one-third of the country underwater and over 3.5 billion people forced to live under the open skies, while some 1,700 others have died.
And with floods wrecking havoc in the country, Pakistan is looking ahead towards another outbreak in health sector, which will further damage the country’s financial standing.
Pakistan aims to put this on the table during the next IMF review and hopes to get leverages on its repayments through extensions in the payment plan and also in easing on terms and condition in financial policies.
However, the country’s hopes of getting financial commitments from global lenders like the World Bank, relies on the outcome of the IMF review.
“The World Bank’s commitment depends on implementing a few conditions,” said Sana Tawfik, an economist working with a financial institution.
“The government would not seek to defer debt payment to the international lenders and would make the due payments. So far, $4.6 billion have been repaid to the external lenders in the current fiscal year.”
