Pakistan is expected to reach an agreement with the IMF next month to resurrect an enhanced bailout package to support the cash-strapped country’s sagging economy, Pakistan Finance Minister Miftah Ismail has said.
Pakistan has repeatedly been seeking international aid to support its failing economy. The talks with the International Monetary Fund are being held in the Qatari capital Doha. He said that the country is projected to need $36-37 billion in foreign financing in the next fiscal year.
Ismail revealed that at present the government was not considering raising fresh foreign debt from the global capital market and commercial banks after the country’s international bonds lost almost one-third of their value, while their yields went up significantly, The Express Tribune reported.
He said that instead of economic growth, controlling inflation was the top priority of the government. “Inflation control will lead to economic growth,” he said.
Giving the breakdown of the external financing requirement, Ismail said “Pakistan is to repay $21 billion in foreign debt in the next fiscal year.” Besides, the country will require another $10-15 billion to finance the current account deficit.
The government is also aiming to boost the country’s foreign exchange reserves by $5 billion to $15 billion next year.
“So, it is a must to enter the IMF loan programme (worth $6 billion) to arrange the required financing,” Ismail said during the talks with the global crisis lender which began on May 18 in Doha.
The finance minister invited all political parties to frame the Charter of Economy, which could include the minimum economic agenda by setting aside the political differences.
Saudi Arabia has agreed to provide Pakistan with a “sizable package” of around $8 billion to help the cash-starved country bolster dwindling forex reserves and revive its ailing economy.
Pakistan secured the deal during the visit of Prime Minister Shehbaz Sharif to Saudi Arabia. The financial package includes doubling of the oil financing facility, additional money either through deposits or Sukuks and rolling over of the existing $4.2 billion facilities.
May 29, 2022