ISLAMABAD (AP) — Pakistan's prime minister on Friday warned of a “tough time" as his government struggles to comply with conditions set by the International Monetary Fund for the next tranche of the country's bailout package.
Prime Minister Shahbaz Sharif addressed an auditorium of top government and military officials in Peshawar, the capital of Khyber Pakhtunkhwa province, where a massive suicide bombing at a mosque inside a high security police and government compound on Monday killed 101 people and wounded 225. Most of the casualties were police.
The attack raised serious questions about the ability of Pakistan's security forces to deal with the recent surge in militancy in the volatile northwest, along the border with Afghanistan.
Sharif spoke just days after IMF officials and Pakistan’s Finance Minister Ishaq Dar resumed talks in the capital, Islamabad, on its bailout — even as the country's foreign reserves dwindle further, and are now at the dangerously low level of $3 billion.
Analysts say there is barely enough to pay the imports bill for the next three weeks.
Pakistan is seeking a crucial installment of $1.1 billion from the fund — part of its $6 billion bailout package — to avoid default. Talks with the IMF on reviving the bailout had stalled in the past months.
The IMF gave the finance minister a “very tough time” in the talks, Sharif said.
“Our economic challenges at the moment are unimaginable," he added. “The IMF conditions which we have to fulfill ... are beyond the imagination. ... But wee we don't have any other option."
Later Friday, Pakistan's currency slipped further, with the rupee trading at 270 to the dollar as the markets closed. Last week it traded at 255 for $1.
Sharif has repeatedly pledged that his government will not default but will manage to secure the loan from the IMF.
Along with the unprecedented economic crisis, Pakistan is also struggling in the aftermath of last summer’s devastating floods that caused up to $40 billion in damages, making it difficult for the government to comply with some of the IMF’s conditions, including increases in the price of gas and electricity and new taxes.
Sharif has often blamed the former premier, Imran Khan, and his government for the economic malaise. Khan was ousted in a no-confidence in Parliament in April, and has since been campaigning for early elections.