IMF ready to work with new govt in Pakistan to ensure economic stability

The IMF is looking forward to working with the new government in Pakistan, a top official has said while keeping mum on jailed former prime minister Imran Khan's demand that the global lender should conduct an "audit" of the election results before approving any new loan for the cash-strapped country.
 

Pakistan Tehreek-e-Insaf (PTI) founder Khan on Thursday said he will write to the International Monetary Fund, demanding the Washington-based institution stop its support to Pakistan where his political rivals, the Pakistan Muslim League-Nawaz and the Pakistan Peoples Party, were on the verge of forming a coalition government with a "stolen mandate."

The 71-year-old former prime minister's message from jail was conveyed through Barrister Ali Zafar, who met him in the Adiala Jail Rawalpindi where he has been incarcerated since last year after being convicted in corruption and other cases.
 

The IMF is looking forward to engaging with Pakistan's new government on policies to ensure "macroeconomic stability and prosperity" for the country, Julie Kozack, the head of the Communications Department of the IMF said, while maintaining silence on any communication to the organisation from jailed former premier Khan on the outcome of the February 8 polls in the country.
 

During the press conference in Washington on Thursday, Kozack was asked about whether Pakistan was on track to secure the third tranche of the stand-by agreement reached in June 2023 and also if the IMF would entertain any letter by Khan calling for investigations into election irregularities.
 

"We look forward to working with the new government on policies to ensure macroeconomic stability and prosperity for all of Pakistan's citizens. And I am going to leave it at that," Kozak said.
 

She said that on January 11, the IMF Executive Board approved the first review of the Stand-By Arrangement, with Pakistan that brought total disbursements under the Stand-By Arrangement to USD 1.9 billion.
 

"The Stand-By Arrangement is supporting the authority's efforts to stabilise the economy and to, of course, with a strong focus on protecting the most vulnerable,” she said.
 

Talking of the fiscal conditions of Pakistan, she said that during the tenure of the interim government, the authorities had “maintained economic stability”.
 

"This has been done through strict adherence to fiscal targets while also protecting the social safety net. It has been done by maintaining a tight monetary policy stance to control inflation and to continue to build up foreign exchange reserves,” she said.

Asked to specifically comment on a possible letter by Khan, she said, “I'm not going to comment on ongoing political developments. So, I don't have anything else to add to what I just said”.
 

Khan on Thursday said he will write to the IMF, demanding the global lender to stop its support to the cash-strapped country until it seeks an "audit" of the elections mired in controversies, including vote rigging.
 

On Thursday, Zafar said the IMF, the European Union and other organisations had a charter that stated that good governance was needed for working in the country or giving a loan.
 

“The most important condition for good governance is democracy,” he said, adding that the people's mandate was stolen “in the darkness of the night” during the Feb 8 polls.
 

Both the PML-N and the PPP won fewer seats in Parliament than candidates backed by Imran Khan. Khan, who could not contest the February 8 elections due to his convictions in some cases including that of corruption, has been barred from holding any public office for 10 years.
 

Khan's PTI has said that the PML-N and PPP are trying to form a government with "a stolen mandate." The current IMF programme is expected to conclude in the second week of April, according to a report by the Dawn newspaper.
 

Official sources said that the new government would seek a fresh loan of about USD 6 billion from the IMF to help it address the issue of balance of payments.
 

“The talks will start soon after the formation of the government and be completed by the announcement of the budget in the first week of June,” according to sources.
 

Pakistan last year avoided default after the IMF provided a USD 3 billion short term loan and it may face problems to meet external liabilities in case the new IMF loan is delayed.
 

Meanwhile, the IMF's review mission is likely to visit Islamabad by the end of this month or early next month, provided the government formation at the federal and provincial levels is complete, according to media reports.
 

The mission will finalise the salient features of the anticipated medium-term bailout package to Pakistan to avert a default on repayment of foreign debts.
 

Earlier, the IMF's review mission was scheduled to visit the country in the first week of February, but the delegation refused to visit on the eve of the general elections.