Pakistan: IMF's bailout package stalled amid debt, unmet loan conditions
What's the story
The International Monetary Fund (IMF) is reportedly likely to hold up the already agreed bailout package for cash-strapped Pakistan.
The global financial body rejected the Pakistani government's claims of meeting all required conditions for the fund release, The Express Tribune reported.
Meanwhile, Fitch Ratings revealed the country has to make $3.7 billion in debt payments in the next two months, i.e., by June end.
Context
Why does this story matter?
Pakistan has been in desperate need of funds due to depleting forex reserves and runaway inflation.
In January, IMF officials toured the country for 10 days but left without reaching an agreement.
Later, negotiations on a reform plan under the $6.5 billion recovery package inked with the IMF in 2019 progressed virtually.
However, it's still unclear if the deal will be finalized this fiscal.
Statement
IMF rejected Pakistan's claims of meeting loan criteria
On Friday, the IMF reportedly released a statement where it rejected the claims made by the Pakistan government of meeting all necessary criteria.
"The IMF continues to work with the Pakistani authorities to bring the 9th review to a conclusion once the necessary financing is in place and the agreement is finalized," The Express Tribune quoted Nathan Porterthe IMF Mission Chief to Pakistan—as saying.
Official
$1.2 billion loan tranche delayed for 7 months
Porter reportedly did not specify the amount of financing required by Pakistan to complete the ninth review for the $1.2 billion loan tranche, which has already been delayed for seven months now.
The IMF statement, however, contradicted what Pakistani authorities have been reporting since February 9, when face-to-face meetings ended inconclusively, according to the news outlet.
Claims
What did Pakistan government claim?
Pakistan's PM Shehbaz Sharif and Finance Minister Ishaq Dar have claimed the country fulfilled all the prior conditions agreed for reaching an IMF agreement, and there was no reason for holding back the funds.
The commitment is part of a 2019 deal with the IMF to provide $6 billion to Pakistan. Notably, the plan was derailed several times, and the full reimbursement is pending.
Debt
$Nearly 3.7 billion debt accumulated for Pakistan: Report
Meanwhile, a Bloomberg report claimed that Pakistan needs to repay another $3.7 billion in external debt by the end of June 30 this year.
The country must pay $700M this month and $3B in June, it said.
A Fitch Ratings official told Bloomberg that China might come to Pakistan's rescue with the rollover of a $2.4 billion loan, which is maturing next month.
Report
Assistance from friendly countries failed to rescue Pakistan
Pakistan has been working hard to avoid default throughout the current fiscal year with the assistance of friendly nations like Saudi Arabia and the United Arab Emirates (UAE) and multilateral loan organizations.
However, the next fiscal year will bring yet another massive monetary requirement for Pakistan.
The IMF was also reportedly unhappy with its progress made toward finalizing the $1.1 billion staff-level agreement.