IMF bailout: a silver bullet?

The mid of February 2023 was upbeat for the government of Pakistan as they inched closer to the preconditions of the International Monetary Fund (IMF) for the revival of the Extended Fund Facility worth $7 billion. However, the resumption of the programme remains in limbo to date, with the IMF demanding the incumbents to “do more”. As usual, the general public is bearing the brunt of years of financial mismanagement on the part of the ruling elite, with inflation peaking at 31.5 per cent year-on-year in February. The unlocking of the $1.1bn tranche seems arduous for the incumbents. The policy level talks, which started in February, are yet to be concluded with the signing of a staff-level agreement (SLA). The government abided by the Fund’s conditions, imposing additional revenue measures worth Rs170bn, introducing a market-based exchange rate, and hiking sales tax and federal excise duty, but the Fund changed its goalpost.