Prime Minister Shehbaz Sharif held a phone call with International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Tuesday during which he expressed hope that the lender would announce a decision pertaining to the release of bailout funds within a day or two.

Pakistan’s ninth review by the IMF under the 2019 Extended Fund Facility (EFF) for the release of a $1.2bn tranche is still pending with fewer than 10 days remaining the programme’s expiry on June 30.

The country was expected to get around $1.2bn from the lender in October last year as part of the EFF’s ninth review. But almost eight months later, that tranche has not materialised as the IMF says Pakistan has been unable to meet important prerequisites.

As the deadline for the programme inches nearer, the premier held back-to-back meetings with Georgieva in Paris last week.

A handout released by the Prime Minister’s Office (PMO) today said that the premier discussed the IMF programme with the global lender’s chief.

“In connection with the meetings held in Paris, the IMF director general acknowledged efforts by the finance minister and his team for completion of the programme,” it said.

Meanwhile, PM Shehbaz expressed hope that coordination on the points of the IMF programme would lead to a decision from the global lender in a day or two.

“The prime minister also reiterated his determination to achieve the goals of improving the economic situation through joint efforts,” the handout added.

It also quoted Georgieva as saying that the Fund wanted Pakistan’s economic situation to improve and appreciated the commitment of the premier.

Talks with IMF

Earlier this month, the IMF had raised several issues with Pakistan’s budget for fiscal year 2024, saying that some of the proposed measures went against the EFF programme’s conditionality.

Esther Perez Ruiz, IMF representative for Pakistan, had earlier said Pakistan needed to satisfy the IMF on three counts, including the budget for the upcoming fiscal year, before its board will review whether to release the pending tranche.

With the programme’s expiry just days away and the IMF seemingly unconvinced with the budget, fears that the deal will not materialise have soared.

For its part, the government responded to the IMF’s concerns, saying that it was “flexible” on the budget and remained engaged with the international lender to reach an “amicable solution”.

Subsequently, the government last week made several changes to the next fiscal year’s budget, including fiscal tightening measures dictated by IMF in a last-ditch effort to secure critical funding.

“Pakistan and IMF had detailed negotiations for the last three days as a last effort to complete the pending review,” Finance Minister Ishaq Dar had said during a National Assembly session on Saturday in which he unveiled the changes.

The changes include Rs215bn additional tax measures, a Rs85bn spending cut, withdrawal of an amnesty on foreign exchange inflows, lifting of import restrictions, a Rs16bn hike in Benazir Income Support Programme allocations, and the powers to increase the petroleum levy from Rs50 to Rs60 per litre.

The revised budget was then passed by the Parliament and later also signed by Acting President Sadiq Sanjrani.

On Monday, an official told Dawn that “almost all the irritants between the IMF staff and the Ministry of Finance were addressed hours before the finance minister’s wind-up speech on Saturday”.

The official also said that it was now up to the IMF’s mission to line up the precise dates for the lender’s executive board approval and disbursement of funds. However, he acknowledged that it was not on the calendar until June 30, when the $6.5 billion Extended Fund Facility agreed in 2019 is set to expire.