Pakistan seeks to restructure IMF loan after floods: report

Islamabad has concluded that it is now impossible for it to meet the conditions of the lending programme of 2008.

LONDON: Pakistan is to ask the International Monetary Fund (IMF) to ease the terms of a $10 billion  loan after enduring the worst floods in its history, a report said Friday.

Islamabad has concluded that it is now impossible for it to meet the conditions of the lending programme agreed in 2008, said the Financial Times, citing Pakistani officials.

Pakistan's Finance Minister Abdul Hafeez Shaikh will travel to Washington next week to try and persuade the IMF to restructure the current loan or consider new financing, said the report.

"Meeting the IMF performance criteria of the current programme is impossible under the present circumstances," said a finance ministry official. "The losses from the floods are huge and we are in no position to meet targets on critical areas such as budget deficit, reducing inflation or even economic growth."

Another official cited in the paper said the IMF either needed to allow "plenty of relaxations on the current programme" or start discussing a new agreement with criteria more suited to flood-ravaged Pakistan.

The IMF in 2008 approved a rescue package for Pakistan as the country struggled to cope with attacks by militants, 30-year-high inflation and fast-depleting reserves. So far, Pakistan has received about $7.3 billion (5.7 billion euros) from the IMF loan, said the FT. The economic damage caused by the floods amounts to at least $43 billion, Pakistani Foreign Minister Shah Mehmood Qureshi told the UN General Assembly's emergency fund-raising session in New York Thursday.

Around 4.6 million people are still without shelter following the wave of destruction wreaked by the flooding, according to the UN. It estimates 20 million people have been affected and a fifth of the country is under water with the risk of cholera, typhoid and hepatitis growing.