Islamabad November 18 2022: Pakistan’s talks with the International Monetary Fund for loan money are delayed because the country is not yet finished assessing the financial impact of this year’s devastating floods, said junior finance minister Aisha Ghaus Pasha.
The IMF, which had planned discussions with Pakistan for September, now wants the South Asian nation to quantify the damage before moving forward. The multilateral lender is considering releasing another $600 million from a $6 billion loan package to Pakistan.
“They would like to see what the implications of the floods are going to be” not only for this quarter, but also for the rest of the fiscal year ending in July, Pasha said in an interview with Bloomberg News.
Pakistan is trying to rebuild a troubled economy after months of financial hits. Moody’s Investors Service recently downgraded the nation deeper into junk on concerns about debt payments. Foreign exchange reserves have dropped to $7.96 billion, the lowest in more than three years. Most dollar bonds now trade at distressed levels.
The floods, which started after extreme rain in June, killed more than 1,600 people, halved economic growth and caused billions in damage. The IMF wants Pakistan to articulate how it plans to rebuild and rehabilitate those who were displaced, according to Pasha.
IMF teams will visit Pakistan when Islamabad completes its homework, said Pasha, who didn’t give an exact date for their arrival.
“There is no disagreement between the two teams,” she added. “They just want us to look forward and also integrate the flood factor.”