Stabilising economy: Pakistan seeks $2bn more from IMF
Finance minister predicts ‘bumpy road’ ahead for national economy.
“The IMF’s deputy managing director has promised me to support Pakistan’s request for an additional $2 billion in loans at the IMF’s Executive Board meeting on September 4,” says Dar. PHOTO: APP
ISLAMABAD:
With the government struggling to bridge the $3 billion additional gap between external monetary outflows and inflows, the International Monetary Fund (IMF)’s deputy managing director has assured Islamabad of his support for an additional $2 billion in loans.
This was revealed by Finance Minister Ishaq Dar on the fringes of a microfinance summit on Monday. He predicted a bumpy road ahead for the national economy, despite the $5.3 billion assistance from the IMF.
“The IMF’s deputy managing director has promised me to support Pakistan’s request for an additional $2 billion in loans at the IMF’s Executive Board meeting on September 4,” said Dar. The $5.4 billion bailout package is also expected to be approved in the meeting.
Dar also revealed that he has requested the Fund to give Pakistan $3 billion in the first year of three-year programme so that the country could comfortably return the outstanding dues of more than $3 billion that will be maturing later this year. He said that in the next fiscal year Pakistan will return $1.2 billion more to the IMF.
Despite Pakistan’s wish for a front cash-loaded programme, the chances are high that the IMF will give each tranche after reviewing progress on the agreed agenda, sources said. Learning from previous experience of repeated failed programmes, the IMF is unlikely to take the risk this time around, they added.
“I’ve also proposed to the IMF management that from the second year of the programme the tranches may be released on a quarterly basis,” said Dar.
Both, the IMF and Pakistan agreed to a $5.3 billion last week, but before qualifying for the programme, the country has to implement about half a dozen preconditions followed by a three-year roadmap of reforms.
According to sources, the biggest threat to the programme will be the Rs2.475 trillion tax collection target which will have to show 26% growth to hit the ambitious goalpost. Any shortfall in revenues will derail the IMF programme, sources said.
Dar said Pakistan has already started following the roadmap agreed with the IMF and the world has also started giving positive signals. “After talks with the IMF, international confidence has been restored and its fresh report on Monday, Moody’s said Pakistan is in the right direction.”
Published in The Express Tribune, July 9th, 2013.
With the government struggling to bridge the $3 billion additional gap between external monetary outflows and inflows, the International Monetary Fund (IMF)’s deputy managing director has assured Islamabad of his support for an additional $2 billion in loans.
This was revealed by Finance Minister Ishaq Dar on the fringes of a microfinance summit on Monday. He predicted a bumpy road ahead for the national economy, despite the $5.3 billion assistance from the IMF.
“The IMF’s deputy managing director has promised me to support Pakistan’s request for an additional $2 billion in loans at the IMF’s Executive Board meeting on September 4,” said Dar. The $5.4 billion bailout package is also expected to be approved in the meeting.
Dar also revealed that he has requested the Fund to give Pakistan $3 billion in the first year of three-year programme so that the country could comfortably return the outstanding dues of more than $3 billion that will be maturing later this year. He said that in the next fiscal year Pakistan will return $1.2 billion more to the IMF.
Despite Pakistan’s wish for a front cash-loaded programme, the chances are high that the IMF will give each tranche after reviewing progress on the agreed agenda, sources said. Learning from previous experience of repeated failed programmes, the IMF is unlikely to take the risk this time around, they added.
“I’ve also proposed to the IMF management that from the second year of the programme the tranches may be released on a quarterly basis,” said Dar.
Both, the IMF and Pakistan agreed to a $5.3 billion last week, but before qualifying for the programme, the country has to implement about half a dozen preconditions followed by a three-year roadmap of reforms.
According to sources, the biggest threat to the programme will be the Rs2.475 trillion tax collection target which will have to show 26% growth to hit the ambitious goalpost. Any shortfall in revenues will derail the IMF programme, sources said.
Dar said Pakistan has already started following the roadmap agreed with the IMF and the world has also started giving positive signals. “After talks with the IMF, international confidence has been restored and its fresh report on Monday, Moody’s said Pakistan is in the right direction.”
Published in The Express Tribune, July 9th, 2013.