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Pakistan PM says 'will have to agree' to 'unimaginable' IMF bailout conditions

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
Pakistan's Prime Minister Shehbaz Sharif speaks at a news conference during a summit on climate resilience in Pakistan at the United Nations in Geneva, Switzerland, January 9, 2023. (Photo by Reuters)

Pakistan's Prime Minister Shehbaz Sharif says the government would have to agree to the International Monetary Fund (IMF) bailout conditions that are "beyond imagination" amid the rapidly worsening economic crisis. 

"I will not go into the details but will only say that our economic challenge is unimaginable. The conditions we will have to agree to with the IMF are beyond imagination. But we will have to agree with the conditions," Sharif said during an apex committee meeting in Governor House Peshawar.

He said the IMF delegation, which arrived on Tuesday, was currently in Islamabad and giving Finance Minister Ishaq Dar and his team "a tough time".

"You all know we are running short of resources," Sharif said, adding Pakistan at present was facing an economic crisis.

The South Asian country's economy is in dire straits, battered by a balance of payments crisis as it attempts to service high levels of external debt, amid deepening political chaos and worsening security.

Pakistan's central bank Thursday said its foreign exchange reserves had dropped again to $3.1 billion. A day before, data showed year-on-year inflation had risen to a 48-year high, leaving people struggling to afford basic food items.

Islamabad secured a $6-billion IMF bailout in 2019, which was topped up with another $1 billion last year.

Currently, an IMF delegation is in Pakistan, after it arrived on Tuesday to restart talks stalled since November for $2.5 billion funds yet to be disbursed.

The visit aims to discuss fiscal consolidation measures the institution needs from Pakistan to clear a 9th review of its Extended Fund Facility, aimed at helping countries facing balance-of-payments crises.

The country’s economic crisis has been exacerbated by the precarious security situation as well as the devastating floods last year that displaced nearly millions of people and destroyed crops over large tracts of land.

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