The International Monetary Fund (IMF) revised and lowered the foreign loan requirement of Pakistan to $25 billion for the current fiscal year, reducing the amount by $3.4 billion indicating a significant improvement for the debt-ridden economy, domestic news media reported on Saturday.
Quoting The Express Tribune newspaper, news agency PTI stated that the IMF also reduced its economic growth projection to 2 per cent, rejecting the government’s external and macroeconomic forecasts. The international body’s delegation completed their discussions with Pakistani officials earlier this week on November 15 and stated that they have agreed to a staff-level agreement that will allow the IMF to disburse $700 million in the second tranche of the priorly agreed $3 billion loan.
The report further stated that relative to July this year, the IMF reduced the foreign loan requirements for the country for the current fiscal year from $28.4 billion to $25 billion. Notably, in the last four months, the government has borrowed $6 billion so far and further expects rollovers of $12.5 billion.
The remainder needs are nearly $6.5 billion, apart from the efforts to secure $12.5 billion in debt rollovers, the report said citing anonymous sources. Earlier this week on Thursday, the Finance Secretary, Imdadullah Bosal, noted that the interim government remained confident about securing the necessary financing to remain afloat.
At the same time, the government has also got some relief as the projected available financing has also been reduced by $3.7 billion due to the issues in getting loans through floating Eurobonds and via foreign commercial banks.
The report further noted that the IMF didn’t accept the estimate of a $4 billion to $4.5 billion current account deficit given by the Pakistani government for the current fiscal, as compared to the earlier estimates of $6.5 billion. It cited sources and stated that the IMF has now given a projection of $5.7 billion, down by nearly $770 million compared to the previous estimates.
The newspaper quoted the finance ministry and said that the IMF has also lowered the economic growth outlook for Pakistan to 2 per cent from its earlier estimate of 2.5 per cent in July. The international body’s estimate is in agreement with the World Bank and Asian Development Bank’s projections.
The global lender also rejected Pakistan’s forecast of economic growth of 3 to 3.5 per cent for the current financial year. Further, it also denied the finance ministry’s estimates for imports at $54.5 billion in the current financial year. The IMF has now given a projection of $58.4 billion, which is lower by $6.3 billion compared to the earlier forecast given in July this year.
Additionally, the IMF gave a revised foreign remittances projection at $29.4 billion, down by $3.5 billion and an outlook of exports at $30.6 billion, reduced marginally, the report said. The lending body also cut the inflation rate estimates from 25.9 per cent to 22.8 per cent, the report said.
Also Read : SEBI Mandates Attachment Of Bank, Demat Accounts Of Karvy Group’s Former Officials To Recover Rs 1.80 Crore