IMF's conditions for Pakistan "beyond imagination", says PM Sharif

Islamabad: Pakistan's Prime Minister Shehbaz Sharif said the IMF bailout conditions for the country are "beyond imagination" and the government will have to agree to them. The financial aid from the global body has been stalled for months. The prospect of national bankruptcy is behind the government's stance. No friendly countries have been willing to offer better bailouts.

A delegation from the IMF landed in Pakistan on Tuesday.

In televised comments, PM Sharif said he will not get into the details but will say that Pakistan's economic challenge is unimaginable. "The conditions we will have to agree to with the IMF are beyond imagination. But we will have to agree with the conditions." The IMF has demanded tax rises and subsidy slashing but the government has held out against them. The country is heading for an election in October.

Pakistan has been witnessing a declining economy for a while now. On Thursday, its central bank said foreign exchange reserves dropped again to $3.1 billion. Analysts said it was enough for less than three weeks of imports. On Wednesday, year-on-year inflation rose to a 48-year high. The population has been struggling to afford basic food items.

External debt, political instability, a complicated security situation, and a balance of payment crisis are said to be behind the dire financial situation, reported NDTV.

The currency plunged to a record low after the government loosed control on the rupee. Petrol prices have also been hiked. Islamabad is no longer issuing letters of credit except for food and medicines. Karachi port is stuffed with thousands of shipping containers with stock people cannot afford.