Pakistan faces ongoing struggles as IMF loan program approval delayed as loan request missing from IMF Executive Board calendar
By Asghar Ali Mubarak
ISLAMABAD: The International Monetary Fund (IMF) has released its Executive Board meeting calendar up to September 18, yet conspicuously absent is the approval of Pakistan’s critical $7 billion loan program. This delay highlights the growing financial challenges faced by Pakistan, as the country remains unable to bridge its external financing gap, currently estimated at between $3 to $5 billion.
The IMF board is set to review other nations’ financial programs, with Bhutan’s review scheduled for September 9 and Norway’s on September 13, followed by Suriname’s 7th review on September 18. Pakistan, however, remains in a precarious position despite the staff-level agreement signed with the IMF on July 12, which was originally seen as a significant breakthrough. The continuing delay in final approval reflects Pakistan’s ongoing difficulty in meeting the IMF’s stringent financing conditions, which have been a critical barrier to unlocking the loan.
In a bid to meet these conditions, Pakistan has been aggressively pursuing various avenues to secure external financing. Among its efforts, the country has applied for a $1.75 billion commercial loan and requested $400 million from the Islamic Trade Finance Corporation of Pakistan. Furthermore, Pakistan has sought $35 million from the Islamic Development Bank and an additional $1 billion from Standard Chartered, indicating the urgency with which it is attempting to resolve its financing shortfall.
Additionally, the federal government has turned to Saudi Arabia for a $1.2 billion loan. The government also hopes to arrange deferred payment plans with the kingdom, both of which are crucial to fulfilling IMF conditions and ultimately unlocking the much-needed loan. These financial arrangements, if secured, would provide essential support for Pakistan’s faltering economy, which remains heavily reliant on the IMF’s assistance.
The absence of Pakistan’s loan approval on the IMF’s calendar, particularly as other nations continue to receive scheduled reviews, underlines the severity of the financial crisis gripping the country. With time running out to meet the IMF’s financial benchmarks, the government must act swiftly to secure the necessary funds. The stakes are high, as this loan represents a critical lifeline for Pakistan’s economic recovery.
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