Pakistan seeks IMF’s assessment for next bailout package

According to official sources, Pakistan has not formally asked the IMF for another bailout programme but has kept the option open.

ISLAMABAD: While officials from the Ministry of Finance deny any talks with the visiting International Monetary Fund (IMF) team regarding any new bailout package, sources at the ministry claim that the government has sought an assessment from IMF for the next loan program.

“The government’s representatives on Thursday have requested the IMF team to give its assessments and conditions for a short-term, midterm and long terms bailout program,” said the sources adding that the lender’s mission was not only visiting Pakistan for a post-program review.

The two sides have also discussed the economic challenges faced by the country at Q block in Islamabad.

The IMF mission has arrived in Islamabad for a week-long visit. The IMF team includes program chief, country representative, and three desk economists among others. Pakistan was represented by heads/representatives from all stakeholders.

According to insiders, the major agenda discussed on Thursday was the current account deficit.

According to official sources, Pakistan has not formally asked the IMF for another bailout programme but has kept the option open.

According to the sources, Pakistan has also informed the IMF team about measures taken through the supplementary budget to reduce the current account and balance of payment deficits. The Fund was also informed about the steps being taken to increase exports. The austerity measures taken by the new government were also shared with the team.

“For post-program review, the IMF representatives in Pakistan usually conducts meetings. The visit of the mission shows other than routine programs,” said an economist in terms of anonymity. “Unpopular steps taken by the government such as increasing gas prices, taxes etc., are not as per the expected demands of the IMF. The devaluation of rupee against dollar, as per foreign lenders, should be at Rs30 to Rs32/per dollar. More difficult decisions may be taken to avail another program from IMF,” he said.

According to an economist, if the visit of the IMF mission is under Article IV consultations for Post-Program Monitoring reports, then the fund will share the same with its Board and the same will later be published exposing the real economic situation of Pakistan.

During the stay, the visiting IMF team is expected to hold talks with officials of the ministries of finance, trade, petroleum, investment and power. They will also meet officials of the Federal Board of Revenue (FBR).

Though Finance Minister Asad Umar dispelled the notion that Pakistan is facing a financial emergency to rush to the IMF for a bailout, the Minister of Information Fawad Chaudhry had recently claimed the US Secretary of State Michael Pompe has assured that his country would not object any loan program of IMF to Pakistan.

After the PTI government took over late in July, talks of Pakistan knocking on the IMF’s door started to surface. US Secretary of State Mike Pompeo then said that it will not support Pakistan’s IMF bailout programme since the funds might be used to repay Chinese loans. Later on, in talks with the foreign ministry of Pakistan during Pompeo’s visit to Islamabad earlier in September, it was revealed that the US will not interfere in Pakistan going to the IMF.

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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]
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