ISLAMABAD: Finance Minister Ishaq Dar said on Monday that total payable till June on account of external account is $21 billion of multilateral, bilateral and commercial and arrangement are being made in this regard.
Replying to questions at a news conference at Prime Minister House on Monday, the Finance Minister said that trade deficit is projected at $12 billion. The country would have to be required to mobilize external resources, roughly about, $31-33 billion and this target is not difficult because in 2015-16, $35 billion were materialized.
He said the difference at that point in time all the indicators of the economy were positive and all the multilaterals were acknowledging and praising and prediction was that Pakistan 18th economy by 2030 and now projected to be 46th economy by 2034.
He wanted that this should be investigated as to how much loss was done to the Pakistani nation, adding that former Military dictator Yahya Khan era was worst period of economic mismanagement but Pakistan Tehreek-e-Insaaf government left that era even behind. He said that arrangements have to be made for $21 billion with lenders roll over, actually the current account deficit has to be financed that is whether the additional resources are required and government is fully positioned as of now.
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About 9th review of the International Monetary Fund (IMF) programme, he said that “we are ready but multilateral has sought more information and of course it is unusual as IMF is seeking information of future and wanted they are some details as lender wanted how the reconstruction and rehabilitation of flood would be financed. Finance minister said that the government is fully committed to complete the IMF programme.
About passing on relief to the decline in international prices of oil, finance minister said that there are sovereign commitments and this is in the interest of the country that the IMF programe is completed. He said that any saving on petroleum prices other than commitment made by the previous government on account of petroleum levy and others would be passed on to the consumers.
Reuters adds: Pakistan will likely secure a multibillion-dollar financial support package from long-time ally Saudi Arabia this month, two sources said, as the country’s ninth review of a $7 billion IMF bailout ran into snags.
The two finance ministry officials said the Saudi package would include deposits boosting the country’s foreign reserves and oil on deferred payments.
Finance Minister Ishaq Dar said earlier he hoped talks with Saudi Arabia would happen soon.
“We are expecting that we will, God willing, get financial support from Saudi Arabia, most likely this month,” one of the senior officials told Reuters, adding it would be around a $4 billion package.
“Some of that package will go to our reserves and the rest is oil and some other commodities on deferred payments,” he said.
“Pakistan has brotherly relations with Saudi Arabia. Both countries have helped each other in times of need,” a finance ministry media official told Reuters, without elaborating or giving any further details.
Pakistan’s economy is facing a balance of payment crisis. The central bank reserves have fallen to $6.7 billion - barely enough for a month of imports. The fiscal deficit has already touched 1% of the GDP in first quarter of current financial year against 0.7% of the GDP agreed with the IMF.
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With the IMF’s ninth review pending since September, Pakistan has desperately been scrambling to secure financing to meet external payment obligations for the current financial year.
Ahead of the review, Pakistan has been trying to approach allies to seek financial support, and Dar had said that he would expect to get $3 billion from a friendly country.
“The IMF has asked for more information to complete the ninth review,” Dar said on Monday, adding it was “unusual” because Islamabad had met all the requirements already. He said the IMF wanted Pakistan to explain as to how the country will fund the cost for the reconstruction and rehabilitation of the devastating flood, which this summer was estimated to have insured over $30 billion in losses.
Copyright Business Recorder, 2022