Pakistan is in talks with the International Monetary Fund (IMF) to put the financial support program back on track, Governor State Bank of Pakistan (SBP), Dr. Reza Baqir, said on Monday.
In an interview with the multi-national news platform Reuters, he said, “We hope to have good news for the market and the world that we are putting the program back on track.”
Pakistan entered a three-year $6 billion IMF program in 2019 but is yet to have its second review. The program was suspended in earlier 2020 and is now reported to be up for resumption.
The program required “decisive fiscal consolidation” and a multi-year plan to strengthen Pakistan’s notoriously weak tax system, and large scale reforms, which are likely to put pressure on the government of Prime Minister Imran Khan.
Khan came to power in 2018, inheriting an economy plagued with problems. However, he was initially deeply reluctant to turn to the IMF, which has provided more than 20 bailout packages to Pakistan over the decades.
However, despite securing billions of dollars in loans from friendly countries, including China, Saudi Arabia, and the United Arab Emirates, mounting economic headwinds forced his government to turn to the fund.