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Experts warn of ‘tough time’ ahead as Pakistan-IMF talks end without agreement



Pakistan and the visiting International Monetary Fund (IMF) mission failed to arrive at a staff-level agreement after talks aimed at unlocking critical funds needed for the ailing South Asian economy concluded on Thursday with both sides agreeing to continue negotiations virtually.

The mission was in Islamabad since January 31 to sort out the differences over fiscal policy that have stalled the release of more than $1 billion from the $6.5 billion bailout package originally signed by the government of prime minister Imran Khan in 2019.

However, at the end of the 10-day “tough parleys”, Pakistan failed to strike the deal with the Fund mission. Although Secretary Finance Hamed Yaqoob Sheikh confirmed that “actions and prior actions have been agreed, but the staff level agreement will be signed subsequently.”

It should be noted that the IMF’s loan is critical for the country’s $350 billion economy as the State Bank of Pakistan (SBP)-held foreign exchange reserves have fallen to $2.91 billion — enough to provide an import cover of 0.58 months.

‘Atrocious’ strategy

Uzair Younus, director of the Pakistan Initiative at the Atlantic Council’s South Asia Centre, while commenting on the development, told that the communications strategy of the [Ishaq] Dar-led Ministry of Finance has been atrocious from the very beginning.

He warned that this was “only the latest in a series of fiascos” that have destroyed the ministry’s credibility and undermined confidence in the economy.

The economic expert predicted that a bloodbath will be seen in the markets, as players earlier refrained from assuming fresh positions in the last few sessions on hopes of the revival of the stalled programme.

‘Tough days ahead’

Vaqar Ahmed, deputy executive director at Sustainable Development Policy Institute (SDPI), told that the MEFP shared has a broader framework which hints that in the days to come Pakistan would have to meet certain conditions.

“The Fund has rejected the gradual approach proposal of Pakistan, saying the time for this has gone and Islamabad now needs to do everything upfront,” he said, revealing that the conditions which are currently on the table incorporate all those promises made during the past reviews, including those related to energy sector, power and gas tariff, levy on diesel, and tax gaps.

The economist said that the Washington-based lender first wants to see action on all these things before it concludes the review, their board gives the approval and transfers the money.

“I believe that there are tough days ahead and the government will first have to show that they can walk the line and then probably the IMF will come through and a board level agreement will be reached,” Ahmed said, adding that he thinks all of this will take approximately one month.

‘Implementation time’

Meanwhile, former adviser to Finance Ministry Dr Khaqan Najeeb lamented that Pakistan should have inked a staff-level agreement with the IMF mission before their departure.

“Still, it is heartening to note that considerable progress has been made on the set of policy reforms that are needed to move forward to complete the review,” he said, adding that it was for authorities to undertake the prior actions, complete reading of the MEFP document received to enable a staff-level agreement. 

The former adviser highlighted that dwindling reserves do not leave much option but to expedite this process already delayed since early November. 

“The actions on revenue, energy, monetary and exchange rate management are quite clear along with the need to firm up commitments for external financing from bilateral and multilateral partners. 

“It is implementation time for the country to address domestic and external imbalances and to regain macroeconomic stability,” he maintained.


In a first for history, PSX crosses the 77,000 milestone.




At 77,213.31, the benchmark KSE-100 hit an all-time high, up 1,005.15, or 1.32%, from the previous close of 76,208.16.

The government’s readiness to seal an agreement with the International Monetary Fund (IMF) following the budget was cited by analysts as the reason for the upward trend.

Experts anticipate that in an attempt to bolster its position for a fresh bailout agreement with the International Monetary Fund (IMF), the budget for the fiscal year ending in June 2025 would set aggressive fiscal goals.

Budget for Pakistan, 2024–2025
Pakistan’s budget for the fiscal year 2024–25, with a total expenditure of Rs18.877 trillion, was presented on Wednesday by Minister of Finance and Revenue Muhammad Aurangzeb.

The Finance Minister, Muhammad Aurangzeb, outlined the budget highlights. He stated that the GDP growth target for the fiscal year 2024–25 is set at 3.6 percent, while the inflation rate is anticipated to stay at 12 percent.

He stated that while the primary surplus is anticipated to be 1.0 percent of GDP during the review period, the budget deficit to GDP is forecast to be 6.9 percent over the period under review.

According to the minister, tax income collection increased by 38% in the current fiscal year, and the province will receive Rs7,438 billion. The Federal Board of income expects to earn Rs12,970 billion in revenue for the upcoming fiscal year.

In contrast to the federal government’s projected net income of Rs9,119 billion, he stated that the federation’s non-tax revenue projections are set at Rs3,587 billion.

The federal government’s total outlays are projected to be Rs18,877 billion, with interest payments accounting for the remaining Rs9,775 billion.

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Pakistan currently has $14.38 billion in foreign exchange reserves.




Pakistan’s commercial banks’ reserves, which stood at $5.28 billion at the conclusion of the week ending on June 7, rose by US$174 million, according to a central bank statement.

Reserving US$6.2 million less, the SBP now has US$9.10 billion in reserves. The causes for the decline in the reserves it had were not disclosed by the central bank.

The SBP released a statement that stated, “SBP reserves decreased by US$ 6 million to US$ 9,103.3 million during the week ended on 07-June-2024.”

The State Bank of Pakistan’s (SBP) foreign exchange reserves were reduced by US$ 63 million as a result of repaying external debt, with the reserves standing at US$ 9.093 billion as of earlier on June 6.

The central bank spokesperson said in a statement that as of the week that concluded on May 31, the nation’s total liquid foreign reserves were $14.31 billion.

In terms of net foreign reserves, commercial banks have US$ 5.22 billion of the overall foreign reserves, according to the SBP.

SBP reserves dropped by US$ 63 million to US$ 9,093.7 million during the week that ended on May 24, 2024, according to the announcement.

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In the local market, the price of gold plummets to Rs240,700/tola.




Gold with a 24-karat purity level has dropped by Rs1200/tola on the local market.

Each tola of 24-karat gold is now selling for Rs240,700, with a further drop of Rs1029 bringing the price of 10 kilos of gold to Rs206,361. These figures are courtesy of the All Sarafa and Jewelers Association.

Meanwhile, after a $2 decline on the global market, one ounce of gold will be valued $2315.

A tola of gold was worth Rs 600 more on Wednesday.

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