The International Monetary Fund (IMF) is preparing to discuss Pakistan’s budget plans for the next financial year in order to approve a staff-level agreement to release $1.1 billion in funding, which has been delayed for months. Negotiations over key budget targets, such as the fiscal deficit, are one of the last hurdles before the IMF approves the funding, which is crucial for Pakistan to resolve its acute balance of payments crisis. The funding is part of a $6.5 billion bailout package the IMF approved in 2019, due to end in June prior to the budget. Pakistan has been in economic turmoil for months with an acute balance of payments crisis, while talks with the IMF have not been successful. Inflation surged to a record 36.4% in April from a year earlier driven mainly by skyrocketing food prices and rising energy costs. IMF’s Pakistan mission chief said that approval of the staff-level agreement for the 9th review will unlock the $1.1 billion tranche. At a news briefing in Washington, IMF Chief Kristalina Georgieva said that the purpose of the IMF-Pakistan talks was to avoid getting to a point where Pakistan’s debt may become unsustainable.
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