*ISLAMABAD: *The PML-N government has left Pakistan’s economy in lurch asit is likely that next government to get bailout package from IMF.
Government has accepted the International Monetary Fund’s (IMF)precondition to let the rupee depreciate by over 4% to qualify for anyfresh bailout package that is needed to avoid a default-like situation.
Notwithstanding Adviser on Finance Miftah Ismail’s statement that thegovernment is not seeking any IMF assistance, the Washington-based lenderis said to have been obliged to steer through highly difficult 2017-18 and2018-19 financial years, Tribune has reported.
The government is expected to take up the issue of new IMF financing inApril during World Bank-IMF spring meetings in Washington.
Ismail does not see any further downward readjustment of the currency inthe near future. However, those who are in the know of things, both in thecentral bank and the Ministry of Finance, maintain that lobbyists at homeand abroad are working to persuade the authorities to go for anotherdepreciation before June.
Insiders described it as a ‘panic situation’ in the Ministry of Finance andthe word ‘bottom line’ is being used for seeking an emergency $6-7 billionin IMF assistance to make timely repayments and tackle the looming balanceof payments crisis.
In the absence of any credible economic team, two officials – Talib Balouchand Khaqan Najeeb – are considered ‘opening batsmen’ of the financeministry to take important decisions.
One is calling for seeking IMF assistance to ward off the impending balanceof payments crisis while the other is suggesting acquiring commercial loanscontinuously at high mark-up.
Since the World Bank and the Asian Development Bank (ADB) have linked theirannual assistance to the IMF’s signal, seeking commercial loans,particularly from China and Chinese commercial banks, are seen a viableoption to manage external inflows.
A total of $1.3 billion in commercial borrowing had been obtained in thelast few months which also included $900 million in just one quarter. Thereis no strategy how to deal with the intensifying balance of payments crisis.