The International Monetary Fund (IMF) said it had made progress during meetings with Pakistan authorities aimed at reaching an agreement on loans, subsidies, and other reforms.
IMF mission chief Nathan Porter said the two sides held “highly constructive discussions,” and agreed on the need to continue to address high inflation and elevated fiscal and current account deficits.
Porter said Pakistan had deviated from policies agreed in the last review under its Extended Fund Facility programme with the IMF, but IMF officials emphasised the urgency of removing fuel and energy subsidies to get back on track.
Pakistan Foreign Minister Bilawal Bhutto Zardari said on Wednesday that the country’s bailout deal with the IMF is “outdated” given a number of global crises.
“This deal is a pre-Covid deal,” he said. “It is a pre-Afghanistan fallout deal. It is a pre-Ukrainian crisis deal. It is a pre-inflation deal.”
Pakistan entered a three-year, $6-billion IMF deal in 2019, but is struggling to implement tough policy commitments.
Separately Bhutto Zardari rejected claims by former prime minister Imran Khan that the US had plotted his downfall.
He said that Khan’s ousting last month was in fact a milestone for Pakistani democracy.
“Pakistan has a history of prime ministers who have been removed undemocratically, unconstitutionally through various means,” Bhutto Zardari said in an interview on the sidelines of the World Economic Forum in the Swiss Alpine resort of Davos.
“We’ve had a prime minister who was removed and hanged,” Bhutto Zardari said with reference to his grandfather, Zulfikar Ali Bhutto.
Bhutto Zardari was a 19-year-old studying at Oxford University when his mother Benazir Bhutto was assassinated. His father Asif Ali Zardari was also president of Pakistan.
- Reuters, with additional editing by George Russell