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ISLAMABAD: For successful completion of the 9th review under the International Monetary Fund’s Extended Fund Facility, US$3 billion fresh (as opposed to rollovers) external financing commitments from friendly countries are required.

This was stated by the former Finance Minister and noted economist Dr Hafeez Pasha. He added that the IMF wants a government that is focused on implementation of required reforms and is concerned at political uncertainty and economic situation in the country.

Pasha regretted that perception and credit rating of the country has plunged to the lowest ebb which may have increased IMF concerns on whether fresh financing would be provided by Saudi Arabia and the UAE which may explain why the Fund has been asking for commitments in writing from both countries.

UAE, Saudi Arabia: Dar says IMF seeking $3bn ‘guarantees’

Former finance minister said that once the staff level agreement is reached, inflows from multilaterals - Islamic Development Bank, Asian Infrastructure Development Bank as well as World Bank and Paris Conference on flood would start materializing to help bridge the financing gap.

Pasha contended that quantum of financing required for the current fiscal year would depend on the trade deficit. Although the trade deficit in February was only $74 million yet it was achieved by squeezing imports and if the same situation remains in the remaining four months of the current fiscal year, financing gap would be less.

Pasha however expressed serious concern that there are $1.8 billion worth of goods in containers, which is not good for the economy.

Former Finance Minister and Adviser to Chief Minister Punjab on Economic Affairs and Planning Dr Salman Shah concurred and stated that shortfall in gross financing needs to bridge the current account deficit and debt servicing may be $3 billion and the Fund requirement is a firm commitment from Saudi Arabia and UAE in this regard.

An anecdotal survey carried out by Business Recorder revealed that the general public has little trust in Ishaq Dar’s capacity to steer the economy towards sustainable growth and hold him responsible for not only the stalled IMF ninth review but also for the high inflation rate, particularly in food items, and the contracting economy that is increasing unemployment levels. Not sure whether the government would be able to implement the agreed conditions.

Copyright Business Recorder, 2023


Comments are closed.

Tulukan Mairandi Apr 01, 2023 09:43am
Further downgrades are on the horizon. It is practically junk rated and will soon be deep junk upon default very soon. It's about time Dar quickly exits to save himself from the ultimate disgrace
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Aamir Latif Apr 01, 2023 11:17am
Why did GoP committed blunders to fix Rs value plus anxious to provide subsidies since Dar take over...???? Wasted time as months of delay had also caused down grade of credit ratings.. Is our FM Dar a fool not to understand repurcassions in IMF deal delay.. If GoP has stopped imports, why not adapt a clear policy on what comes in and what is banned... Increase of duty makes no sense as country filthy rich has lot of corrupt money to spent.... Country suffers... Poor vision.
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KhanRA Apr 01, 2023 11:44am
It’s incredible that we are being forced to get our Friends to give us money before IMF will. No wonder our friends are sick of us, and are siding with India. Sharif and Dar are making sure that the entire world aligns with India, while we are left to beg.
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KhanRA Apr 01, 2023 11:46am
@Tulukan Mairandi, first our clown FM/PM/Marriyum Aurangzeb will blame Imran Khan - while hoping that we don’t ask why if the economy they inherited was so bad, then why it did not collapse under Miftah Ismail and only imploded under Dar.
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Aamir Latif Apr 01, 2023 12:48pm
Dar and Co made matters worse by his Rs fixing jugglery and latest of fie subsidy, brainchild of PM, akways eager for subsidies thinking pakii has fortune... Reforms must, Pakistani cannot continue with borrowed money, friendly lenders do not trust Pakistan anymore, like aid with IMF deal... Delay and miseries
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Naeem Abbas shah Apr 01, 2023 02:42pm
very nice
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Muhammad Ali Ahsan Apr 01, 2023 04:00pm
@KhanRA, its people like u in establishment too who had hopes from this cabal of crooks. No need to shed tears now.
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Amira Apr 01, 2023 05:28pm
When will pakistan stop expecting the world to support them. Stop popping out babies you can't afford and start paying annual tax. Does pakistan not feel shame having there handout all the time. Nothing changes with pakistan. Time to cut them off so there forced to act like functioning adults.
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TimeToMovveOn Apr 01, 2023 06:22pm
For decades religion and Kashmir has been used by the establishment to hoodwink the people and have an outsized role over the economy. This has messed up with democratic institutions. Today Pakistan neither has economy nor Kashmir. The only thing that is left is a mess.
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Yousaf Hyat Apr 01, 2023 06:23pm
No amount of aid can fix Pakistan unless Village becomes the basic unit for all administration. Revenue , education, security, irrigation, health must be dealt with at and within liquidity the village generates. Nothing more nothing less .
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Yousaf Hyat Apr 01, 2023 06:25pm
@Tulukan Mairandi, Dar or anyone else is not escaping. I have a feeling they will not be allowed to leave to rainy UK no more ..
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