The United States has urged Pakistan to “continue working with the International Monetary Fund (IMF) and other international financial institutions towards macroeconomic reforms” for economic stability in the country.
The development comes after the Imran Khan’s party PTI wrote a letter to the Fund urging the lender to endorse an audit of the 2024 elections for the sake of political stability in the country, before entering into a dialogue with Islamabad for a new bailout package.
“For now, we can share that PTI’s founding chairman Imran Khan does not want any adverse effects on the economy of Pakistan. In the letter, we have reminded IMF of its promises that the election will be free and fair,” he said.
During a regular press briefing on Wednesday, US State Department Spokesperson Matthew Miller was asked about the PTI’s letter.
“As the US knows, Pakistan needs $2 billion alone in March to be able to avoid economic breakdown. How do you see this effort on PTI’s part to be contacting IMF and also talking about election rigging?” the reporter asked.
To this, Miller said, “I’ll just say with respect to the IMF that we support Pakistan’s efforts to break free from the vicious cycle of debt and international financing.”
He further said that the long-term health of Pakistan’s government and economy was crucial for the country’s stability.
“Pakistan’s new government must immediately prioritise the economic situation because the policies over the next several months will be crucial to maintaining economic stability for Pakistanis,” he said.
Miller also urged Pakistan to “continue working with the IMF and other international financial institutions towards macroeconomic reforms”.
Pakistan averted default last summer thanks to a short-term IMF bailout, but the programme expires in April and a new government will have to negotiate a long-term arrangement to keep the economy stable.
Last week, Julie Kozack, the director of the communications department at IMF, was asked whether Pakistan was on track to securing the third tranche of the short-term agreement and whether the IMF would entertain any letter by PTI’s Imran about the election irregularities.
In her response, Kozack said: “On Jan 11, the IMF executive board approved the first review of the Stand-By Arrangement with Pakistan that brought total disbursements under the Stand-By Arrangement to $1.9 billion. The Stand-By Arrangement is supporting the authority’s efforts to stabilise the economy and to, of course, with a strong focus on protecting the most vulnerable.”
She said that during the tenure of the caretaker government, the “authorities have maintained economic stability”.
“This has been done through strict adherence to fiscal targets while also protecting the social safety net. It has been done by maintaining a tight monetary policy stance to control inflation and to continue to build up foreign exchange reserves,” she said.
“We look forward to working with the new government on policies to ensure macroeconomic stability and prosperity for all of Pakistan’s citizens. And I am going to leave it at that.”
As for Imran’s letter, Kozack said: “I’m not going to comment on ongoing political developments. So, I don’t have anything else to add to what I just said.”
