Pakistan Seeks Bigger Bite of IMF Apple: Requests $10 Billion

Pakistan Seeks Bigger Bite of IMF Apple: Requests $10 Billion

Islamabad, July 2, 2024 – Pakistan has requested the International Monetary Fund (IMF) to expand its proposed bailout package to $10 billion, citing the country’s deteriorating economic conditions.

Sources within the government revealed that Pakistani officials have urged the IMF to enhance the new bailout package to a range between $8 billion and $10 billion. The request comes as Pakistan grapples with severe fiscal challenges and aims to stabilize its economy through substantial financial support.

Pakistan has communicated to the IMF that it has met all the prerequisites by presenting a stringent budget for the fiscal year 2024-25. The tough budget, marked by significant austerity measures, was designed to meet the IMF’s conditions and secure the much-needed financial assistance.

However, sources indicate that the IMF remains firm on its commitment to a $7 billion new bailout for Pakistan. The IMF has reportedly informed Pakistani authorities that the pledged amount is non-negotiable and that all stipulated actions pertain to this $7 billion package.

In line with its commitment to the new loan program, the IMF has demanded that Pakistan increase the electricity tariff by Rs. 5 per unit before July 10, 2024. This tariff hike is a crucial condition for the new program’s approval. Additionally, the IMF has set increases in electricity and gas prices as prior actions necessary for the new bailout.

Despite having met all the IMF’s conditions, including the recent budget approval from parliament, Pakistan continues to face economic challenges that require further assistance. The Economic Coordination Committee (ECC) recently decided to maintain gas prices for residential consumers but approved a tariff increase for captive power plants.

The IMF’s insistence on stringent measures, coupled with Pakistan’s demand for a larger bailout, underscores the complexities of navigating international financial support amid a challenging economic landscape. The coming days will reveal whether Pakistan’s plea for an expanded bailout will be heeded, providing a crucial lifeline to its struggling economy.