Pakistan prepared to say 'No' to IMF
Pakistan is due to meet with IMF officials during the World Bank and IMF annual meeting in Washington from Sept. 23-25.
"There is no immediate threat to the balance of payment and our foreign exchange reserves position is comfortable enough," the official said, speaking on condition of anonymity.
"There is no crisis at hand that will call for an immediate action. But we will stay in close contact with the IMF."
Pakistan has been struggling since 2008 to keep its economy afloat with an $11 billion IMF loan. The programme was halted last August due to slow implementation of fiscal reforms and around $3 billion is left to be disbursed.
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@Lateef Khan: What is the "good news" that you think I am distorting?
I deplore constant comparisons and reference to the Indian economy, our "dear and great neighbour" as Zia called them. I think Pakistan should have higher standards -- look at Indonesia, Thailand, China, Brazil, Turkey and so on. Even look at Bangladesh that will achieve a growth rate of close to SEVEN PERCENT this year. How do they do that when we are stuck at 3% growth and 15% inflation? How do they manage their public enterprise sector? Why do they not have a circular debt problem? What is their power situation? Do they suffer crippling black-outs?
If I did say that slowing growth was a good way to slow inflation what I meant was that is a price you have to pay or the trade-off that you have to accept. The whole of Asia, including China, are in a monetary tightening phase as inflationary pressures loom. Unlike us who seem to have become immune to inflation and its effects on the poor, these countries take inflation very seriously. In India, a government fell because of the high price of onions. No surprises that the Reserve bank of India has increased interest rates TWELVE TIMES. Of course this will impact growth. In China, inflation above 6% (their target is 4%) can create social unrest and that is the last thing they need or want.
I am not a fan of Bollywood and don't even know for sure what that means. I have no time for frivolities.
@ Meekal Ahmed
Please try to appreciate a good news! You somehow turn a good news into bad when it comes to Pakistan and when it comes to Indian economy slowing down, you said: 'Its a good way to control inflation'. . I think you meant lose when you wrote 'loose'. This mistake is very common in Bollywood subtitles!
Pakistan isn't willing to undertake reforms so it wants to leave the IMF program. That is the real reason. In time we'll face another crisis and our govt. will be go running to the IMF again.
@amjad: There are no grants anymore and Pakistan is a blend country at the Bank because it's per capita income on a PPP basis is about $2,500.
This is a great step towards real "independence". How about saying "no" to World Bank, and all others for their charity, grants and loans? Is this ever going to happen???
Yeah lets wait for an actual (our "nth" one in some 25 years) balance of payments crisis to occur to get us to CONSIDER economic reforms
Strictly-speaking, Pakistan does not have a "balance of payments need" at the momement. This is the usual justification/rationale for countries seeking IMF support.
However, experience teaches that a seemingly "comfortable" cushion of reserves can deplete with alarming speed. The people making these reassuring statements need to revisit our own history and try and learn from those episodes. Otherwise we will be condemned to repeat the same mistakes again.
Finally, the fact that elections are looming raises the risk that we could loose control over the macroeconomy, starting with the budget.
If I were them, I would be ever-vigilant to the first signs of stress.