Pakistan is seeking its thirteenth bailout from The International Monetary Fund (IMF) but negotiations have been marred with delays and uncertainties. The bailout is conditional on Pakistan meeting IMF demands which experts believe could be too drastic and hurt Pakistan’s economy even more.
IMF MD Christine Lagarde met with PM Imran Khan on the sidelines of World Government Summit in Dubai in which she said economic reforms would enable Pakistan to restore the resilience of its economy and lay the foundations for stronger and more inclusive growth. A statement issued by Lagarde said that “I reiterated that the IMF stands ready to support Pakistan. I also highlighted that decisive policies and a strong package of economic reforms would enable Pakistan to restore the resilience of its economy and lay the foundations for stronger and more inclusive growth. As emphasized in the new government’s policy agenda, protecting the poor and strengthening governance are key priorities to improve people’s living standards in a sustainable manner.” Prime Minister Imran Khan is in Dubai on a day-long visit, on the invitation of Sheikh Mohammad Bin Rashid Al-Maktoum to participate in the seventh edition of the World Government Summit. This annual gathering of heads of states/government, policymakers, business leaders and experts aims to provide an occasion to discuss current and future opportunities to improve governance through reform, innovation and technology.
Khan is accompanied by Foreign Minister Shah Mehmood Qureshi, Finance Minister Asad Umar, Minister for Maritime Affairs Syed Ali Haider Zaidi and Adviser to the PM on Commerce Abdul Razak Dawood.
While the government keeps changing its plans publically regarding a bailout package from IMF, Pakistan has in the meantime sought financial assistance from Middle Eastern allies such as Saudi Arabia and the United Arab Emirates, who have loaned it in excess of $10 billion to ease the pressure on its dwindling foreign currency reserves. On Saturday, Pakistan also revised its growth figures for the last financial year to 5.2 per cent from a previously reported 5.8 per cent, after a sharp cut in the figure for large-scale manufacturing, the statistics office said.
When the original estimate was reported in April by the government of Prime Minister Shahid Khaqan Abbasi it was hailed as the strongest growth in 13 years. Before the revisions to last year’s GDP figures, Pakistan’s deficit to GDP ratio, estimated at 5.8 per cent in 2017-18, was expected to hit 6.9 per cent this year, according to IMF data.
The IMF talks come amid a worsening macroeconomic outlook, with growth expectations slashed for the current fiscal year to about 4 per cent from 6 per cent previously forecast.
Published in Daily Times, February 11th 2019.
