IMF has urged Pakistan to reduce its large budget deficit to bolster the struggling economy. ILLUSTRATION: JAMAL KHURSHID
A high-level Pakistani delegation will travel to Washington this week for talks with the International Monetary Fund (IMF) and US officials on the country’s struggling economy, officials said on Monday.
The economically troubled state, which is heading for a general election on May 11, has seen its foreign exchange reserves dwindle and currency slide and has been expected to seek a fresh bailout package from the IMF.
The April 17-22 visit will be led by the newly-appointed prime minister’s adviser on finance, Shahid Amjad Chaudhry, who is also the de facto finance minister in the caretaker set-up running Pakistan before the election.
Prime Minister Mir Hazar Khan Khoso appointed Dr Shahid Amjad Chaudhry, a professor of economics, as his adviser on finance, besides bringing back Dr Waqar Masood as secretary finance. Masood was responsible for negotiating the last IMF programme.
The development took place hours before the Pakistani team was scheduled to fly to the United States to attend the IMF-World Bank spring meetings. Dr Chaudhry will now lead the delegation in place of Nasir Khoso, who has been appointed secretary textiles in place of Dr Masood. Dr Masood will also accompany the delegation in the US.
Other members of the delegation include the secretary of the Economic Affairs Division and State Bank of Pakistan Governor Yaseen Anwar. Anwar has so far opposed the IMF programme, but has failed to provide an alternate plan.
As a World Bank and IMF member, Pakistan’s participation is “mandatory” but the delegation will use the opportunity to discuss the country’s economy with their officials in Washington, a finance ministry spokesman said.
“We will engage with them and update them on macroeconomic data,” he said, though he refused to comment on local media reports saying the team would seek a new IMF package.
The team will also meet State Department officials in Washington to discuss payments of the Coalition Support Fund, money paid by the US to compensate Pakistan for its fight against Islamist militants.
The IMF bailed Pakistan out in November 2008 with an $11.3 billion loan package to stave off a balance of payments crisis, but Pakistan abandoned the deal in 2011, refusing to carry out strict financial reforms.
Islamabad has paid back more than $2 billion in loans to the IMF, but analysts say the repayments strain the rupee and drain foreign exchange reserves, which neither remittances nor Coalition Support Fund payments can make up for. Meanwhile, the IMF has urged Pakistan to reduce its large budget deficit to bolster the struggling economy.
Pakistan’s growth remains too weak, underlying inflation is high and the trade balance is heading in the wrong direction, the IMF said in a statement in November.
Published in The Express Tribune, April 16th, 2013.
Like Business on Facebook to stay informed and join in the conversation.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ