The International Monetary Fund (IMF) has called on Pakistan to secure "significantly more financing" in order to complete its long-stalled ninth review of the bailout programme.
The IMF said that Pakistan's economy is facing stagflation, which is a combination of high inflation and slow economic growth. The IMF also said that Pakistan has very large financing needs, and has been affected by a series of shocks, including severe floods.
The IMF has been providing Pakistan with financial assistance since 2019. In order to receive the next tranche of funding, Pakistan must first complete the ninth review of its bailout programme. However, the review has been delayed due to a number of factors, including Pakistan's failure to meet some of the IMF's conditions.
The IMF has now said that Pakistan needs to secure "significantly more financing" in order to complete the review. The IMF did not specify how much additional financing Pakistan needs, but it is likely to be in the billions of dollars.
Pakistan has already received some financing from its external partners, including the United Arab Emirates, Saudi Arabia, and China. However, it is unclear whether this financing will be enough to meet Pakistan's needs.
The IMF's call for additional financing is a sign that the IMF is not confident that Pakistan will be able to complete its bailout programme without further assistance. The IMF's concerns are likely to be shared by Pakistan's creditors, who are also likely to be reluctant to provide additional financing without assurances that Pakistan will be able to repay its debts.
The IMF's call for additional financing is a setback for Pakistan's government, which is already facing a number of challenges, including a weak economy, high inflation, and political instability. The government will now need to find a way to secure the additional financing that the IMF is demanding, in order to avoid a further delay in the bailout programme.
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