In a bid to avert a possible default, Pakistani Prime Minister Shehbaz Sharif announced on Wednesday that the country is close to finalizing a deal with the International Monetary Fund (IMF) for the much-needed $1.1 billion loan tranche.
Speaking at a federal cabinet meeting in Islamabad, the prime minister said that there were only a few items left to be implemented before the IMF program could be revived.
Pakistan has been struggling to meet the tough conditions set by the global financier to unlock the next tranche of the loan facility. The IMF has demanded that the country expand its tax base, end exemptions for the export sector, and raise energy prices to help poor families.
The country’s dire economic crisis has left the State Bank of Pakistan (SBP) with foreign exchange reserves that barely cover one month of imports. With a crippling economy and a need for funds, the government has been working to resolve the stalled loan tranche with the IMF.
During the meeting, the prime minister discussed the country’s economic progress with parliamentarians and acknowledged the tough times the nation is facing. He stressed the need to learn from past mistakes and move forward to overcome the crisis.
To increase revenue, the government recently approved a supplementary finance bill that raises the sales tax from 17% to 25% on a range of imported goods including household appliances, cars, cosmetics, and chocolates.
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