Amid reports that the World Bank has delayed approving $1.1 billion in loans for Pakistan, the multilateral donor on Thursday termed the news as “baseless”.
World Bank Country Director for Pakistan Naji Benhasin said on his Twitter handle: “Press reports referring to the World Bank’s decision to delay the approval of potential bank operations in Pakistan are baseless.”
Media reports earlier claimed that the Washington-based lender had delayed the approval of two $1.1 billion loans to Pakistan until the next fiscal year.
However, Bahasin clarified that all the dates for sanctioning the loans were pre-determined.
(2/2) …the World Bank decides on the timing for sharing project proposals for Board consideration following due process and based on the proposed projects’ readiness.
— Najy Benhassine (@WBPakistanCD) January 19, 2023
“Indicative of tentative board approval dates of all our proposed operations, as well as their amounts, and the World Bank will share project proposals for board consideration after due process and preparation of proposed projects. decides the time of The World Bank official added.
A finance ministry source told the British Wire Service on condition of anonymity that the approval of the World Bank loans has been pending since June, according to a report by JEE News.
“The major issue is the circular debt management plan and tariff revision in the power sector,” the source said. “These actions are pending on our side.”
He noted that the World Bank and the Ministry of Finance did not immediately respond to requests for comment.
Pakistan’s economy has been battered by an emerging political crisis, with the rupee falling and inflation at a decade-high, while devastating floods and a major energy shortage have piled on the pressure.
The South Asian nation’s huge national debt – currently $274 billion, or nearly 90 percent of gross domestic product – and the never-ending struggle to service it make Pakistan particularly vulnerable to economic shocks.
The State Bank of Pakistan (SBP) has foreign exchange reserves of $4.3 billion, their lowest level since February 2014 – while the country’s International Monetary Fund (IMF) bailout program It has been stalled since September 2022.
