IMF team to visit Pakistan this month in final bailout push

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Staff Report

ISLAMABAD

A mission team from the International Monetary Fund (IMF) will travel to Pakistan this month, the IMF said on Monday, amid growing expectation that talks on a long-delayed bailout are due to be wrapped up soon.

The announcement was made by the Office of the Resident Representative of the IMF in a press release following reports that the IMF mission’s visit of Pakistan for finalising the package may be delayed as both sides are still engaged in an intense discussion.

“The Pakistani authorities and IMF staff held constructive discussions during the IMF/World Bank Spring Meetings in Washington DC towards an IMF-supported programme,” the IMF statement said.

“At the request of the authorities, an IMF mission will be going to Pakistan before the end of April to continue the discussions.”

Pakistan was last year expected to sign up for its 13th IMF bailout programme since the late 1980s but talks ground to a halt, with officials saying the conditions attached to the proposed IMF loans could hurt economic growth.

The country’s macroeconomic outlook has deteriorated in recent months, with the central bank lowering growth forecasts and raising rates at a time when inflation is at a five-year high. The rupee has also lost about 35 per cent since December 2017.

Finance Minister Asad Umar earlier this month visited Washington for talks with the IMF, which on Monday described those talks as “constructive discussions”.

Meanwhile, Asad Umar revealed on Monday that Pakistan would sign a bailout agreement with International Monetary Fund (IMF) that would be worth $6-8 billion.

Briefing the National Assembly’s Standing Committee on Finance, Revenue and Economic Affairs chaired by Faizullah Kamoka, the finance minister said the IMF finalised a bailout package for Pakistan during talks between the two sides at a recent visit by the Pakistani delegation to the United States.

Pakistan would receive funds from the World Bank and Asian Development Bank immediately following the IMF bailout, he said.

Umar said the IMF package would ease off pressure from the country’s foreign reserves.

External account pressure reduced Pakistan’s international reserves to $6.6 billion by mid-January 2019, but with short-term financing from Saudi Arabia, the United Arab Emirates and China, foreign reserves increased to $10.5 billion at the end of March.

The finance minister further assured that the capital market would also improve following the IMF programme.

Speaking to media later, he said the public will not be impacted by the IMF agreement, and the government has no plans to raise electricity prices, the minister said.

Umar said he met with Financial Action Task Force (FATF) President Marshall Billingslea during the US visit, who assured him that any decision would be taken on technical grounds.

A delegation of FATF will visit Pakistan in the third week of May to review the implementation efforts.

IMF did not object to an asset declaration scheme proposed by Pakistan, sources said earlier, pointing out that Pakistan had already shared a draft of the proposed scheme with the IMF and the FATF.

Asad Umar is also set to meet Prime Minister Imran Khan and take him into confidence regarding the IMF talks.

Information Minister Fawad Chaudhry, speaking to media earlier today, said the finance minister will inform the nation regarding the IMF agreement in the coming days.

Chaudhry said the country can expect some major news about the economy within the next two days.

“Pakistan’s economy is moving towards strength,” he said, adding that there had been “positive progress” with the Paris-based anti-terror laundering watchdog FATF as well. Additional input by Reuters