• Thursday, April 18, 2019

IMF agrees to lend $6bn to Pakistan: sources

Discussion in 'Pakistan Economy' started by Laozi, Feb 10, 2019.

  1. Laozi

    Laozi SENIOR MEMBER

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    IMF agrees to lend $6bn to Pakistan: sources

    [​IMG]

    • IMF team accepts govt’s stance of not further jacking up electricity prices
    • Lauds govt’s approach towards the state-owned loss-making organisations
    • Repayment of IMF loan taken in 2013 will start from June this year
    ISLAMABAD: The government has reportedly decided to take up to $6 billion loan from the International Monetary Fund (IMF) from the next fiscal year.

    Sources told Pakistan Today that the government’s economic team and the international lending organisation has reached an agreement in their recent communication. “IMF has agreed to give the loan on Pakistan’s conditions,” they claimed.

    According to details, Pakistan has assured the lending organisation that the government would make reforms in the Federal Board of Revenue besides increasing the revenue at 1.5pc of the GDP from next fiscal year.

    Earlier, it was reported that the finance minister had refused to revise the revenue target of FBR despite the shortfall of Rs188 billion in the first seven months.

    Sources claimed that the economic team also assured the lending organisation that the government would increase the spending on its social safety network.

    In the budget presented in April 2018, the allocation for Benazir Income Support Progamme (BISP) had raised to Rs124.7 billion for the fiscal year 2018-19 and the PTI government, in its manifesto, had stated that it would increase the funding for the downtrodden segment of society.

    Sources further claimed that the PTI government assured the IMF team that expenditure would be further cut down to 10pc.

    “IMF team also accepted the government’s stance for not further jacking up the electricity prices, as the team is satisfied with the recent measures pertaining to electricity prices,” they added.

    Sources said that the IMF team expressed satisfaction with the government’s approach towards the state-owned loss-making organisations, as the government is establishing Sarmaya Pakistan Company to revive around 200 loss-making organisations.

    The Pakistan Muslim League-Nawaz (PML-N) government had also borrowed $6.2 billion from IMF in 2013 under the extended fund facility for a period of three years.

    Sources said that the repayment of IMF loan taken in 2013 would start from June this year and the government would “repay the loan by getting another loan up to $6 billion”.

    Pakistan had formulated a Memorandum of Economic and Financial Policies (MEFP) for discussion with IMF in November last year in which the economic team informed that the authorities had devised a homegrown stabilization plan so that an orderly adjustment can take place in the fiscal year 2019.

    The assumptions and the contours of the short-run stabilization plan for the next fiscal year were aimed at increasing the foreign reserves from $11 billion to $13 billion, remittances $21 billion, foreign direct investment $3 billion, exports $27 billion, imports curtailment up to $54 billion, and current accounts deficit $12 billion.

    The government also shared that the PKR-USD parity had depreciated by 31pc and the policy rate had increased by 425 points cumulatively since December 2017 on the monetary and exchange rate policies front.

    Significantly, the prime minister had abolished discretionary spending powers for the president, prime minister, ministers and governors to enforce fiscal discipline. Similarly, the government had also taken an unprecedented measure whereby all proposals for supplementary grants are now to be approved by the Federal Cabinet rather than the Ministry of Finance.

    Talking to Pakistan Today, Ministry of Finance spokesman Dr Khaqan Najeeb did not say anything about the finalisation of the agreement, but stated that “productive dialogue continues with IMF on all areas including fiscal, energy, structural reforms and monetary policy”.

    He said the interaction between Pakistan and IMF is being done through local meetings, phone calls, video conference and emails, adding that the two sides continue to exchange views on the reform framework to move forward.

    “The discussions are part of regular ongoing interactions between the government and IMF and will continue in the coming weeks as well,” he concluded.

    https://profit.pakistantoday.com.pk/2019/02/09/imf-agrees-to-lend-6bn-to-pakistan-sources/
     
  2. jupiter2007

    jupiter2007 SENIOR MEMBER

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    6 billion is not even enough for 6 months. We need at least 12 billion to cover for 12 months, 15 billion will be better.
     
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  3. Nilgiri

    Nilgiri ELITE MEMBER

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  4. Death Professor

    Death Professor FULL MEMBER

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    IMF is only for BoP(not that we really needed it, it's just that other institutions are now more willing to lend us now), rest you get it from other institutions like World bank etc.

    Did any one say we weren't going to IMF? I mean gov, did finalized that it's going to IMF in nov-dec, 80% of negotiations are done 20% are getting resolved.
     
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  5. Jackdaws

    Jackdaws BANNED

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    Reward for helping Taliban negotiations?
     
  6. Skull and Bones

    Skull and Bones ELITE MEMBER

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    Congratulations to Pakistan for keeping IMF in business. :tup:
     
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  7. Salza

    Salza SENIOR MEMBER

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    It was expected that Pakistan will opt for a scaled down loan which is now expected to be around $6 billions than $ 12 billions. Pakistan tough stance on proposed imf conditions worked out.
     
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  8. jupiter2007

    jupiter2007 SENIOR MEMBER

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    We are 100% going to IMF. Negotiating terms and conditions sometime takes longer, once it’s finalized, contract will be signed.

    We need the money for defense deals in work. Russians are not willing to offer loans for the whole amount so we need to cough up some money up front.
     
  9. Skull and Bones

    Skull and Bones ELITE MEMBER

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    That is definitely a step in right direction. :enjoy:
     
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  10. Śakra

    Śakra SENIOR MEMBER

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    Where is the esteemed tomato economist who said pakistan wont go to IMF?
     
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  11. Skull and Bones

    Skull and Bones ELITE MEMBER

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    @BHarwana
     
  12. aman_rai

    aman_rai FULL MEMBER

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    Hm log ke taraf ek kahawat h... Karza le ke ghee Pina...
     
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  13. ejaz007

    ejaz007 SENIOR MEMBER

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    We have already fulfilled the conditions for the loan.
     
  14. enquencher

    enquencher FULL MEMBER

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    He has just come out of 1month of self induced ban..he will soon start with his brain farts.we need @SunilM to take on la tamatino
     
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  15. Śakra

    Śakra SENIOR MEMBER

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    Is SunilM permabanned?