Pakistan to approach IMF in 20 days

Islamabad, Nov 12: Pakistan's top finance ministry official Shaukat Tarin has said that the government would be approaching the International Monetary Fund (IMF) in 15 to 20 days for a bailout package and for endorsement of its programme. ''The IMF was not thrusting any harsh conditionality for the bailout package and was accepting what was being proposed. There was no harm in approaching the organisation even if a loan agreement was not reached,'' Mr Tarin was on Wednesday, Nov 12 quoted as saying by Dawn newspaper. Mr Tarin claimed that international financial institutions had endorsed and appreciated the government's economic programme and social safety net, but it was essential to get the programme approved by the IMF before financial assistance was obtained from other donors. ''IFIs have seen our targets as achievable but these need a lot of discipline and a lot of determination,'' he said.

He said Pakistan was facing enormous economic challenges for various reasons, such as global shocks, shortage of oil and food and inaction on the part of the previous government. ''This ultimately reflected in massive loss of foreign exchange reserves which have declined to less than seven billion dollar from 16.4 billion dollar in October last year,'' the official said. Mr Tarin said that inflation was at 25 per cent, fiscal deficit was rising, currency had depreciated by over 30 per cent and the economic growth rate had come down to less than five per cent. He said the stock market had declined by over 40 per cent from 15,500 points to a little over 9,000 points.

''In this situation, the country not only needs economic revival but also restoration of the confidence of rating agencies and IFIs to ensure inflow of foreign currency to strengthen our reserves. We are also facing the balance of payment crisis.'' ''We will ask our development partners to bridge the balance of payments gap. When we consulted with IFIs and development partners, they sought endorsement by the IMF. We believe if at all we do not go to the IMF for funding, we need its endorsement of our plans,'' he added.

UNI