IMF Requests Stricter Terms for Pakistan's $8 Billion Loan

Pakistan has formally requested an $8 billion loan package from the International Monetary Fund (IMF) to utilize its remaining quota under the Extended Fund Facility. This request exceeds the initial offer by $2 billion. Discussions are ongoing to determine the final size of the bailout package and potential loans from other countries.

The IMF is considering providing a $6 billion deal, subject to meeting specific conditions. Pakistan's current quota in the IMF stands at $2.7 billion, with a maximum limit of $11.7 billion. Having already utilized $3.3 billion from previous agreements, Pakistan has approximately $8.4 billion remaining in its quota.

For the new loan, the IMF has outlined conditions, including the implementation of revenue measures equivalent to 1.6% of the GDP. While Pakistan aims to secure the full remaining quota, the IMF has indicated a $6 billion offer with stricter terms.

With the government requiring substantial financing for the upcoming fiscal year, discussions are underway to secure the necessary support from various sources. Prime Minister Shehbaz Sharif has emphasized reducing reliance on bilateral loans and focusing on self-sufficiency.

Despite the IMF mission returning to Washington without finalizing a deal, discussions are set to be presented to the IMF Board for a decision. Conditions for the bailout package include parliamentary approval of the budget, utility price hikes, and the enactment of specific ordinances.

The IMF has mandated parliamentary approval of ordinances related to governance improvements in government-owned entities. Pakistan will need to seek approval for amendments in various entities to align with governance regulations.

Pakistan's request for an $8 billion IMF loan package reflects the country's efforts to address its financial challenges. The ongoing discussions and conditions set by the IMF highlight the importance of implementing necessary reforms to secure the required financial support.