Govt seeks IMF loan programme extension

Government seeks 9 month extension of $11.3b bailout package.

KARACHI: Pakistan has formally asked for a nine-month extension of its $11.3 billion International Monetary Fund (IMF) bailout package, a source involved with IMF talks said on Monday.

The seven-tranche IMF programme, which has supported Pakistan’s economy since it was agreed to in November 2008, was scheduled to end this year but the release of the last two tranches has been delayed because the government has yet to implement key fiscal reforms.

“Pakistan has asked for an extension and the IMF board is considering the request,” said the source. Failure to complete the IMF programme could discourage other international donors from future lending.

The government needs all the financial support it can get to recover from summer floods that inflicted nearly $10 billion in damages.

It sought the extension after missing several deadlines on implementing a reformed general sales tax (RGST), which was originally scheduled for July and is a key condition to getting the sixth tranche.

Published in The Express Tribune, December 21^st, 2010.