IMF visit to Pakistan as per schedule

ISLAMABAD: Despite having security concerns owing to recent sit-ins by the Tehreek-e-Labaik Pakistan (TLP), the IMF plan has unchanged to visit Islamabad next week for holding formal talks on the written request of Islamabad for sending its mission to finalise details of fresh bailout package.

Although the possible size of the IMF programme will be reduced than expected before in the wake of getting breathing space from friendly countries, it will depend upon the projection of oil prices in international market over the short to medium term period. Pakistani authorities are making fresh projection with the range of oil prices hovering around $80 to $100 per barrel in the international market, but it might go up if US moves ahead against Iran by slapping more economic sanctions.

An IMF mission is scheduled to visit Pakistan from November 7 to 20 for holding two week long talks to finalise fresh bailout package under possible 36 months Extended Fund Facility (EFF).

The size of the bailout package will definitely be reduced in the wake of breathers obtained by Islamabad from Saudi Arabia and China in the range of $6 billion each from both the countries. The UAE package is still under discussion. “As of today all plans are unchanged,” a brief reply states by the IMF sources based in Islamabad and Washington DC when asked about the schedule of IMF mission due here from November 7.

The Pakistani authorities believe that the current account deficit and trade deficit was expected to narrow down because of ongoing trade war between the developed countries especially the USA and China. It will result into reducing pressure on imports, but it will also have negative impacts on our exports in months ahead. The current account deficit, which stood at in the range of $2 billion on monthly basis, had decreased to around $900 million, but it was yet to see that how much this trend was going to prevail in months ahead during the remaining period of the current fiscal year. There are clear cut signs that the country’s GDP growth was slowing down and inflation was picking up so interest rates might further go up to control increasing inflationary pressure. It will further choke expansionary plans of the private sector because the cost of borrowing will further increase in months ahead.

However, the sources said that it might not be possible for Pakistan to withdraw its written request made to the IMF for fresh bailout package

except the Fund placed highly controversial conditions that might not be possible for Islamabad to accept and fulfill it. However, the size of the programme would be definitely reduced after getting breathing space from the friendly countries.