Sharif made the comments in a meeting of civil and military leaders in the northwestern city of Peshawar he chaired to prepare a response to Monday’s mosque bombing that killed more than 100 people.

“Our economic situation is unimaginable,” the premier said. “As you know, the IMF mission is in Pakistan, and that’s giving us a tough time,” he said.

“You all know we are running short of resources,” Sharif said, adding Pakistan “at present was facing an economic crisis that’s beyond imagination.”

IMF’s Pakistan representative did not immediately respond to Reuters request for comment.

Sharif made the remarks in the context of funds the country might need for any military or counter-terrorism response to the resurgent Islamist militancy.

The IMF mission is visiting Pakistan 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.

Pakistan’s central bank reserves at present stand at $3.09 billion, the lowest since 1998 and not enough to cover the cost of three weeks of imports.

The IMF’s demands aimed at controlling the country’s budget deficit have led to Pakistan leaving its currency to market based exchange rates and hiking fuel prices.

Islamabad is in a $6.5 billion IMF programme. An IMF delegation is in Pakistan to restart talks stalled since November for $2.5 billion funds yet to be disbursed.

Still, despite the economic situation, Sharif said his country will do whatever possible to fight militancy.

“We will use all resources in our capacity to fight this menace,” he said.

Policy talks to begin today

After three days of technical dialogue, the talks between Pakistan and IMF are set to enter into policy talks which are expected to go on for the next seven days.

THe IMF delegation met the offcials from multiple government departments including FBR and NEPRA and suggested revenue-boosting measures such as ending electricity subsidies. Ways to contain Pakistan’s burgeoning circular debt were also discussed, with IMF reportedly saying that improving tariff collection was the only way forward.

Officials from the Fund have also asked the government to set up an asset declaration system to keep track of assets of bureaucrats.

In the next phase of policy talks, electricity prices, general sales tax and petroleum levy are expected to be discussed.