ISLAMABAD: Prime Minister Shehbaz Sharif has said he hopes an agreement for a $1 billion loan with the International Monetary Fund will be done this month.

“I fully expect that an agreement with the IMF will be signed this month and we will get out of these difficulties. And multilateral institutions will also support us,” he said while addressing the inaugural ceremony of the Green Line Train service in Islamabad on Friday.

Finance Minister Ishaq Dar, Railways and Civil Aviation Minister Khawaja Saad Rafique and Planning and Development Minister Ahsan Iqbal also attended the ceremony.

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

Disbursements from the package were suspended in November, due to the lack of progress on fiscal consolidation, hastening Pakistan’s slide deeper into a balance of payments crisis, with foreign exchange reserves currently only able to cover three weeks of imports.

Left with only $3.68 billion in foreign exchange reserves, Pakistan barely has enough to cover three weeks of imports, and desperately needs the IMF to release the next $1 billion tranche of its bail-out programme to head off a potential default.

PM Shehbaz’s statement came a day after the IMF’s announcement that its staff mission would visit Pakistan on January 31 for talks on the ninth quarterly review of a funding programme pending for almost four months.

However, this came after the “unofficial” cap on the dollar’s value was removed by forex traders. The local currency fell by Rs.24.5 or 9.6% against the dollar on Thursday.

Pakistan secured a $6 billion IMF bailout in 2019. It was topped up with another $1 billion last year to help the country following devastating floods, but the IMF then suspended disbursements in November due to Pakistan’s failure to make more progress on fiscal consolidation.

PM Shehbaz stressed the need for adopting austerity at a massive scale to tackle difficult economic problems. He added that the government had set its priority keeping in view its foreign exchange reserves, thus allowing the import of medicine and food as essential items.

‘Pulling country out of quagmire’

Finance Minister Ishaq Dar was sanguine that things would come back “on track”. But, he added that it was a “tough task”, “long-distance”, and PM Shehbaz needed more time.

“We are working hard and assisting him [PM Shehbaz]. This quagmire is not the result of this government’s eight months but the five years of the previous government. We are suffering from the consequences of the adventures that started then — Dawn drama, Panama drama and PML-N ko farigh karo (get rid of the PML-N),” he said and claimed that the country was bearing the brunt of such “adventures”.

He stressed the need for introspection to know how Pakistan’s economy fell and entered this quagmire.

The finance minister added that the premier had great qualities and the entire team was assisting him in pulling Pakistan out of the quagmire of economic woes. “God willing, we will come out of it. Pakistan was created to survive.”