Pakistan is in talks with the International Monetary Fund (IMF) to conclude the ninth review of its bailout program, which will unlock $1.1 billion in funding for the cash-strapped country. The IMF has been working with Pakistan since 2019 to implement fiscal and structural reforms under a $6.5-billion program, but the disbursement of funds has been delayed due to the COVID-19 pandemic and policy differences.

The ninth review, which started in February, is expected to be finalized once Pakistan secures the necessary financing to cover its balance of payments gap for the current fiscal year, which ends in June. Pakistan has announced pledges worth $3 billion from Saudi Arabia and UAE, but the funds have yet to materialize. China has also provided debt relief and refinancing to Pakistan, which is a key partner in its Belt and Road Initiative.

The IMF supports Pakistan’s efforts to implement policies that will help it achieve macroeconomic stability, reduce debt and inflation, and boost growth and social spending. The IMF mission chief, Nathan Porter, said that the IMF is also assisting Pakistan in preparing its budget for fiscal year 2024, which is due to be passed by the National Assembly before end-June.

The IMF program has been unpopular among many Pakistanis, who blame it for causing high inflation and hardship. The consumer price index rose by 36.4% year-on-year in April, the highest level since 2010. The IMF has urged Pakistan to phase out subsidies and increase taxes and electricity tariffs to reduce its fiscal deficit and improve its revenue collection.

However, some analysts believe that the IMF program is necessary for Pakistan to avoid a default on its external debt obligations and to restore investor confidence. Pakistan’s foreign exchange reserves stood at $16 billion as of April 30, barely enough to cover four weeks of imports. The country also faces security challenges and political instability, which could hamper its economic recovery.

Pakistan hopes that the completion of the ninth review will pave the way for the resumption of other sources of financing, such as from the World Bank and the Asian Development Bank. The country also aims to tap into the global bond market and attract foreign direct investment to boost its growth prospects.