Govt may not ask for fresh IMF loan

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ISLAMABAD: Technical talks between Pakistan and International Monetary Fund (IMF) under Post Programme Monitoring (PPM) would start from tomorrow (Wednesday) in Dubai wherein Islamabad would present a macroeconomic framework for the current fiscal year 2012-13 before the Fund.

Sources informed The Nation that Pakistan' team had left for Dubai for holding technical talks with IMF, which is scheduled from September 26 to 30. Adviser to the Finance Ministry Rana Asad Amin who is also spokesperson has confirmed that talks between Pakistan and IMF would start from Wednesday. Following the technical talks, a high-level delegation including IMF's mission chief Jeffery Frank would visit Pakistan in the first week of October to hold policy-level meetings with President/ Prime Minister and Finance Minister.

Sources further informed that Pakistan would present macroeconomic framework for the ongoing financial year 2012-13 in the technical talks in which current account deficit of the country is forecasted to stand at $3.12 billion, trade deficit at $16.65 billion, GDP growth at 4.3 per cent and inflation rate at around 10 per cent in the current fiscal year 2012-13.

According to sources, talks could also focus on Islamabad's capacity to repay its foreign loans to the IMF within the ongoing financial year. It might be mentioned here that Pakistan's foreign exchange reserves would remain under severe pressure during the ongoing financial year 2012-13 due to heavy repayment of $2.9 billion to the International Monetary Fund (IMF). Pakistan has started repaying to IMF from last fiscal year 2011-12 by repaying some $1.2 billion.

Pakistan entered in IMF programme in 2008 for $7.6 billion bailout package, which was increased to $11.3 billion but the country was not eligible for the last two disbursements of $3.2 billion due to failure to comply with the performance criteria. The government was failed to bring reforms in General Sales Tax (GST) and power sector, which became the reason in suspending the programme.

Sources were of the view that Pakistan is unlikely to make any request to IMF for seeking new loan programme in the current talks, as it would take place under Post Programme Monitoring (PPM).

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