The International Monetary Fund (IMF) and Pakistan have not reached a staff-level agreement, despite the country fulfilling a variety of conditions set by the IMF. The government continues to pay salaries and pensions to civil servants, and there have been no reports of civil unrest or financial default.
However, inflation is at its highest level in 59 years, and foreign direct investment has dropped significantly due to economic and political uncertainty. Pakistan is facing $3.7bn of debt payments in the next two months, with a financing gap of up to $2bn remaining. Although China, the UAE, and Saudi Arabia have provided some assistance, the IMF is averse to combining the last two reviews of the bailout program and releasing the entire sum at once.
Analysts suggest that the IMF’s demands reflect a widening trust gap, which needs to be addressed if Pakistan is to secure a fresh IMF program. The IMF has asked to be satisfied with Pakistan’s proposed policies, including budgetary proposals, which it considers to be shifting goalposts.