Pakistan Close to Striking Bailout Deal with IMF, Says Finance Minister Asad Umar
Pakistan's Finance Minister Asad Umar | (Photo: Twitter)

Islamabad, February 13: Pakistan's Finance Minister Asad Umar announced on Monday that his government was on the verge of finalising a bail-out package from the International Monetary Fund following Prime Minister Imran Khan's meeting with the global lender's chief Christine Lagarde in Dubai.

Along with the IMF package, Pakistan has also secured loans from friendly countries -- US $3 billion loan from the UAE to support its fragile economy; Saudi Arabia has committed an additional US$ 6 billion to Pakistan as part of a bailout package to help shore up Islamabad's dwindling foreign currency reserves. Pakistan also reportedly received financial assistance from China.

Addressing the Sarhad Chamber of Commerce and Industries in Peshawar, Umar said a deal with the IMF looks imminent and that there was a convergence of views between the two parties on the need to implement structural reforms in the country, reiterating Khan's remarks in the aftermath of the meeting Sunday, Geo TV reported.

"There has been a decrease in the difference we had with the IMF. The IMF has changed its position... It seems we have come closer to an agreement with the IMF. Insha'Allah (God willing) this will be the last agreement. This will happen when businesses grow," he was quoted as saying by the channel.

He stressed that even though a cash-strapped Pakistan is going through tough times, its economy would be lifted by its people, not by anyone coming from the outside. "If we take the right decisions the economy would rise. It is the responsibility of the business and trading community to put Pakistan on the path towards progress." "Prime Minister Khan told the IMF that 'we want to sign on the package'," Umar added.

Imran Khan met Christine Lagarde in Dubai on February 10 on the sidelines of the 7th edition of the World Government Summit and discussed the conditions of the bailout package for his cash-strapped country.

After the meeting, Lagarde said that the global lender stands ready to support Pakistan. Khan also tweeted about his meeting with Lagarde. "There was a convergence of our views on the need to carry out deep structural reforms to put the country on the path of sustainable development in which the most vulnerable segments of society are protected," he said.

Although the Pakistan government has breathing space due to the funds promised by Riyadh and the UAE loans, an IMF programme is essential to unlock access to resources from other multilateral lenders like the World Bank and the Asian Development Bank, as well as the global capital markets.

Officials have said that Pakistan would seek around US$ 8 billion from the IMF which would be the biggest package by the IMF for Islamabad. A team from the IMF visited Pakistan in November to discuss the possible bailout  but the talks ended with no agreement. Pakistan’s government has since then worked to agree to the terms laid out by the IMF in order to secure the bailout funds.

Pakistan is in need of these funds as a huge tranche of its debt service payments – almost $8 billion is due this year along with needing funds to restructure the economy and avert a balance of payments crisis. (With PTI inputs)