Pakistan, which is facing the danger of emptying foreign exchange reserves, has now got a big blow from the IMF. After 10 days of talks, now the IMF has not taken any clear decision on giving relief funds.
The IMF team reached Pakistan on Thursday. After 10 days of talks, Pakistan is in despair. On the other hand, according to Pakistani media Geo News, Pakistan’s Finance Secretary Hamid Sheikh says that an agreement has already been made with the IMF on emptying foreign exchange reserves.
Pakistan will not get Bailout package
Pakistan government was negotiating for 10 days to get bailout package from IMF. Both the sides could not talk. Because whatever the government of Pakistan is spending on its people, the IMF has a problem. IMF says that there is a big difference between Pakistan’s fiscal deficit and revenue.
The International Monetary Fund does not trust the promises being made by the Government of Pakistan. Second, the IMF does not believe in the credibility of the statements made by other countries about giving loans to Pakistan.
Keeping both the issues in view, the IMF has prepared ‘Memorandum for Economic and Financial Policies’ (MEFP) has not yet been handed over to the Government of Pakistan. It was also informed that the fresh installment under the bailout package of the International Monetary Fund (IMF) is stuck for months.
What is the bail-out package of the IMF?
International Monetary Fund i.e. IMF mainly helps countries to increase monetary help in the world, bring financial stability and promote international business.
IMF provides financial assistance to countries in crisis. whereby countries implement policies that restore economic stability and growth.
The IMF also provides precautionary financial assistance to help prevent crises. The IMF constantly revises the lending system to meet the changing needs of countries. This is called the bailout package.
Let us tell you that during Imran Khan’s government, Pakistan had moved forward for a bailout package of US $ 6 billion in 2019 from the International Monetary Fund. It was increased to US $ 7 billion last year. That is, the IMF has already amended the bailout package given to Pakistan.
Currently the ninth review of this package was being done. Regarding which now the IMF has not cleared anything. If there is no IMF deal with Pakistan, then the situation will turn from bad to worse.
Inflation in Pakistan has reached its highest level in 48 years. These figures are from the Statistics Bureau of Pakistan. Pakistan’s inflation rate in January 2023 is the highest since 1975. Pakistan is already under the burden of foreign debt. In times of crisis, friendly countries are also withdrawing their helping hand from Pakistan.
What will be the loss to Pakistan if there is no deal with IMF
Foreign exchange reserves will be badly affected
Pakistan had to repay its foreign debt by May this year, in such a situation, when the IMF did not clear anything on giving loan to Pakistan. If not done, then Pakistan will come in the list of default.
Pakistan may go through a period of poverty
Pakistan’s foreign exchange reserves will fall. It has been around 4 billion dollars, that means Pakistan will not have money to buy goods from abroad after two or three weeks.
Pakistan’s economy will get worse
Pakistan’s economy is in dire straits, people are starving for food and many cities are facing power outages. There is power failure in cities like Karachi, Lahore, Islamabad.
While there is no power supply, locks are hanging from hospitals to offices. In such a situation, if the IMF also withdraws its hands, then Pakistan will be forced to go through the worst situation till now.
Salaries of government employees will be cut more < /p>
Looking at the economic condition of the country, the Government of Pakistan has given instructions to cut the salaries of government employees by 10 percent. The prices of electricity and gas have also increased. If the loan is not received from the IMF, it may instruct to further cut the salaries of government employees along with electricity gas shortages.
Foreign exchange reserves will fall further
According to Reuters report, State Bank of Pakistan i.e. SBP’s foreign exchange reserves have fallen to its lowest ever level of $4.343 billion. Due to non-receipt of the relief package, the foreign exchange reserves in the banks of Pakistan may stand on the verge of ending.
Foreign companies working in Pakistan will exit
Pakistan’s companies will be closed if they do not get the loan. Even if the companies are not closed, there may be mass layoffs in them. Foreign companies working in Pakistan will also turn to other countries. Black marketing and hoarding will also increase in the country, due to which the prices of goods will increase wildly.
A look at the IMF loan to Pakistan
In December 1958, Pakistan first approached the IMF for a loan . As of July 2019, IMF has approved SDR 23.656 billion loan to Pakistan. SDR 23.656 billion loan means $ 31.629 billion. The SDR is the unit of IMF account.
Which government borrowed from the IMF
Benazir and Nawaz Sharif in the 1990s While demanding a loan, the Musharraf government also had to knock on Washington’s door for financial help. In the last 63 years IMF has approved SDR 23.656 billion loan to Pakistan. But only SDR 14.189 billion was transferred to Pakistan’s account.
Nawaz and Imran had governments in Pakistan between 2013 and 2022. During this, IMF approved SDR8.661 billion loan and gave SDR 7.553 billion loan to Pakistan. Imran Khan government had demanded loan from IMF almost a year after coming to power
Then Bretton Wood, the biggest institution of IMF, refused to deal with Pakistan. In the year 2019, a loan of more than 1 billion was given by the IMF. In 2020, IMF gave 1.015 billion SDR to Pakistan.
In the year 2022, the Imran government took a loan of $1 billion
In February 2022, the IMF gave Pakistan SDR 750 million (about $1 billion ) loaned. At the end of the month, the then Prime Minister Imran Khan announced subsidies on petrol and diesel.
In March 2022, reports emerged that the IMF had suspended Pakistan’s $6 billion loan programme. Have given. After this no loan was given to Pakistan till May. then Imran Khan also resigned from his post and Shehbaz Sharif of PML-N became the prime minister.
