“Tomorrow, IMF board meeting will be held; Pakistan may get up to $1.2 billion from IMF; market sentiment will remain positive in coming days,” he said.
With sky-high inflation and foreign exchange reserves insufficient to cover a month’s worth of controlled imports, analysts say Pakistan’s economic crisis could turn into a debt default in the absence of an IMF bailout.
With the IMF agreement, Pakistan can now unlock other external financing. Fitch said local authorities expect $25 billion in gross new external financing in FY24, against $15 billion in maturing public debt, including $1 billion in bonds and $3.6 billion from multilateral lenders.
The South Asian country has also seen serious political uncertainty since former Prime Minister Imran Khan was ousted by a no-confidence motion in April last year.
To ensure that the program’s steps are implemented before the October elections, the lender’s team met with all mainstream political parties to seek support and consensus for the SBA. Khan’s Pakistan Tehreek-e-Insaf said it supported the deal.
