islamabad: Cash-strapped Pakistan and the IMF have agreed to extend the stalled bailout package by up to one year and increase the loan size to USD 8 billion, giving a breathing space to the new government led by Prime Minister Shehbaz Sharif, a media report said on Sunday.
The understanding was reached after crucial talks between Pakistan Finance Minister Miftah Ismail and IMF Deputy Managing Director Antoinette Sayeh in Washington, The Express Tribune reported, citing sources.
Subject to the final modalities, the IMF has agreed that the program will be extended by another nine months to one year as against the original end-period of September 2022, while the size of the loan would be increased from the existing USD 6 billion to USD 8 billion, the paper reported, citing sources.
The International Monetary Fund is expected to issue a statement on Monday on the development.
Minister of State for Finance Dr Aisha Ghaus Pasha, outgoing State Bank Governor Dr Reza Baqir, Finance Secretary Hamid Yaqoob Sheikh and Pakistan's Executive Director to the World Bank Naveed Kamran Baloch also participated in the meeting. Ismail was in Washington to renegotiate the USD 6 billion bailout package that was stalled by the previous Imran Khan regime.
The Pakistan Tehreek-e-Insaf government and the IMF had signed a 39-month Extended Fund Facility with a total value of USD 6 billion. However, the previous government failed to fulfil its commitments and the program remained stalled for most of the time as USD 3 billion remained undisbursed.
Before taking Pakistan's case to the IMF Board for approval, Islamabad would have to agree on the budget strategy for the next fiscal year 2022-23, the sources said.