The federal government has decided to take a $1.5b loan at 4.5 per cent from the Gulf market to fulfil its immediate needs. Sources in the ministry of finance confirmed to The Express Tribune that some of the members of the 20-member delegation that visited Dubai recently for talks with the International Monitory Fund (IMF ) team also met key persons to discuss the possibilities of a loan.
The loan will help keep the fiscal deficit at the level agreed to with the IMF. The loan will also be useful in budget-making for the next financial year because if Pakistan fulfills the IMF conditions before the next financial review due in July, it will not only be successful in getting its tranche of $1.7b from the IMF, but it will also be able to get $1b released that is stuck with the World Bank and the Asian Development Bank.
The sources pointed out that the IMF’s stance during the Dubai talks was that Pakistan’s budget deficit for the current fiscal year 2010-11 should remain at about 6.5 per cent while Pakistani side insisted that since according to the latest statistics the deficit was equal to 5 per cent of the GDP, Pakistan will try to curtail it with in this limit. According to the sources, the IMF team will wait until July to see if Pakistan’s claims are proved to be true or not.
Published in The Express Tribune, May 22nd, 2011.
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