Pakistan would have to agree to IMF bailout conditions ‘beyond imagination’: Shehbaz Sharif

Shehbaz Sharif. [File Photo]

On Friday, the Prime Minister of Pakistan Shehbaz Sharif said that the government of Pakistan would have to agree to IMF bailout conditions that are “beyond imagination”

Sharif, as per AFP, in a televised address, said, “I will not go into the details but will only say that our economic challenge is unimaginable. The conditions we will have to agree to with the IMF are beyond imagination. But we will have to agree with the conditions”.

Pakistan’s economy is in dire straits, stricken by a balance of payments crisis as it attempts to service high levels of external debt, amid political chaos and a deteriorating security situation.

On Thursday, the country’s central bank said its foreign exchange reserves had dropped again to $3.1 billion dollars, which analysts said was enough for less than three weeks of imports.

Earlier on Wednesday, year-on-year inflation had risen to a 48-year high leaving Pakistanis struggling to afford basic food items.

Ahead of the IMF visit, Islamabad began to bow to pressure with the prospect of national bankruptcy looming and no friendly countries willing to offer less painful bailouts.

The government loosened controls on the rupee to rein in a rampant black market in US dollars, a step that caused the currency to plunge to a record low. Artificially cheap petrol prices have also been hiked.

The world’s fifth-biggest population is no longer issuing letters of credit, except for essential food and medicines, causing a backlog of thousands of shipping containers at Karachi port stuffed with stock the country can no longer afford.

In 2019, the former PM of Pakistan, Imran Khan, who was ousted last year in a no-confidence motion, negotiated a multi-billion-dollar loan package from the IMF.

But he reneged on promises to cut subsidies and market interventions that had cushioned the cost-of-living crisis, causing the programme to stall, AFP reported.

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