Islamabad: The IMF has revised down Pakistan’s foreign loan requirements to $25 billion for the ongoing fiscal year — reducing it by $3.4 billion in a big relief for its cash-starved economy, according to a media report on Saturday.
The Washington-based global lender also lowered the economic growth projection to just 2 per cent, turning down the government’s external as well as macroeconomic forecasts, The Express Tribune newspaper reported.
The International Monetary Fund’s delegation wrapped two-week-long talks with Pakistani officials on November 15 and announced that a staff-level agreement has been reached to enable it to release $700 million in the second tranche of an already agreed $3 billion loan.
The report said that in comparison with July this year, the IMF lowered the foreign loan requirements for this fiscal year from $28.4 billion to
$25 billion.
In four months, the government has already borrowed $6 billion while it expects rollovers of $12.5 billion.
The remaining needs are about $6.5 billion in addition to the efforts for timely securing the $12.5 billion debt rollovers, said the sources.
Finance Secretary Imdadullah Bosal on Thursday said the interim government was comfortable that it would secure the needed financing to
remain afloat.
However, there will not be much respite for the government as the estimated available financing has also been cut by $3.7 billion because of the problems in acquiring loans through floating Eurobonds and from foreign commercial banks.
The sources said that the IMF did not agree to Pakistan’s projection of $4 billion to $4.5 billion current account deficit during this fiscal year against the earlier projected figure of $6.5 billion.
They added that the IMF had now projected a deficit of $5.7 billion — a reduction of about $770 million in comparison with its old estimates.
The finance ministry sources told the newspaper that the IMF had further reduced its economic growth projection for Pakistan to 2 per cent from July’s estimate of 2.5 per cent.
The lender’s fresh forecast is now in line with the World Bank and Asian Development Bank’s projections. The IMF did not accept Pakistan’s forecast of 3 per cent to 3.5 per cent economic growth in this fiscal year.
The IMF also did not accept the finance ministry’s projection of imports worth $54.5 billion during this fiscal year.
The lender has now estimated it at $58.4 billion, but its revised figure is $6.3 billion less than what it estimated in July this year.
Some of the gains that Pakistan will make because of the low imports are expected to be lost because of a reduction in the projected remittances. As against the old forecast of $32.9 billion, the IMF has now projected the foreign remittances at $29.4 billion — a reduction of $3.5 billion, the sources revealed.