IMF to conclude talks in Pakistan
International Monetary Fund (IMF) review talks conclude in Pakistan
The review has been part of a larger effort to assist the South Asian power in overcoming its debt crisis. Following a successful review, Pakistan will receive the final portion of a multi-billion dollar rescue package that it secured last July in order to avert a sovereign debt default.
In its current situation, Pakistan is working with a debt-to-GDP ratio above 70%, and interest payments towards debt will soak up 50-60% of the government’s revenues for this year, which is the worst ratio amongst countries with large economies.
In order to receive the bailout funds at the conclusion of this review, Pakistan needed to meet 25 IMF-set benchmarks, including revising its budget and raising interests rates.
In the short term, Pakistan will receive the final $1.1 billion tranche of its bailout funds following the review, as the country has met all necessary benchmarks set by the IMF. Pakistan will also likely use their recent success to build a case for a larger bailout program sponsored by the IMF of almost $6 billion. A longer term program would be beneficial to Pakistan’s struggling economy, and the IMF will likely be willing to assist, especially following Islamabad’s success in meeting initial IMF benchmarks.
