Miftah Ismail holds govt responsible for ‘delay’ in IMF deal

LONDON: Former finance minister and Pakistan Muslim League-Nawaz (PML-N) leader Miftah Ismail on Friday held the incumbent government responsible for delay in deal with International Monetary Fund (IMF), ARY News reported.

Talking to journalists in London, the former finance minister said that the delay caused by the incumbent government has severely impacted the IMF deal, warning that the country still faces default risk.

“The agreement with the international lender should have been completed six moths ago,” Miftah Ismail said, claiming that Pakistan has not yet been able to fulfill the condition of securing $6 billion from friendly countries.

Following the situation, the PML-N leader noted, IMF will reach to a conclusion after the Budget 2023 is announced. “Fundamental reforms are needed to get out of the current situation”, he added.

In response to a question, Miftah Ismail said that incumbent finance minister Ishaq Dar does not need his advice. “I should also have the right to criticise the policies”, he added.

Responding to a question about political situation, he said that Pakistan Tehreek-e-Insaf (PTI) was the ‘most popular party’ in Pakistan before the recent vandalism. “The party’s violent arrests may affect PTI support,” he said.

A day earlier, Finance Minister Ishaq Dar said that Pakistan will not make tough decisions on the demand of the International Monetary Fund (IMF) anymore.

In an informal conversation with journalists, Ishaq Dar said that it is completely up to the International Monetary Fund (IMF) to sign a staff-level agreement or not.

He clarified that the government will not make tough decisions on IMF’s demand anymore. “We have already implemented pre-conditions of the IMF but not anymore.”

He added that the government has a plan for $3.7 billion in debt repayments in May in June and it is not facing any difficulty. Dar expressed hopes that China will also rollover $2.4 billion loan for Pakistan, whereas, the budget will be presented on June 9.

Pakistan could default without IMF funds

Earlier, Moody’s Investor Service claimed that Pakistan could default without an International Monetary Fund (IMF) bailout as its financing options beyond June are uncertain.

According to the Bloomberg report, Grace Lim, a sovereign analyst with the ratings company in Singapore, said that Pakistan’s financing options beyond June are highly uncertain and South Asian country can “default” given its very weak reserves.

“We consider that Pakistan will meet its external payments for the remainder of this fiscal year ending in June. However, Pakistan’s financing options beyond June are highly uncertain. Without an IMF program, Pakistan could default given its very weak reserves,” Bloomberg said while quoting Grace Lim.

The report further highlighted that Islamabad is struggling to restart a $6.5 billion bailout program from the Washington-based lender, which has stalled after the government failed to meet some loan conditions.

“Political tensions ahead of elections due this year are adding to the risk of a delay in the loan, as former premier Imran Khan is showing no signs of backing down against the government and military,” the report said.

It is pertinent to mention here that the IMF issued the schedule of board meetings in which Pakistan is not included in any agenda until May 17.

Funding will also not be available from international financial institutions as the staff-level agreement is not reached, moreover, the budget-making process can be affected if transactions with the IMF are not concluded.