*ISLAMABAD: *The PML-N government has left Pakistan's economy in lurch as it 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 any fresh bailout package that is needed to avoid a default-like situation.
Notwithstanding Adviser on Finance Miftah Ismail’s statement that the government is not seeking any IMF assistance, the Washington-based lender is said to have been obliged to steer through highly difficult 2017-18 and 2018-19 financial years, Tribune has reported.
The government is expected to take up the issue of new IMF financing in April during World Bank-IMF spring meetings in Washington.
Ismail does not see any further downward readjustment of the currency in the near future. However, those who are in the know of things, both in the central bank and the Ministry of Finance, maintain that lobbyists at home and abroad are working to persuade the authorities to go for another depreciation before June.
Insiders described it as a ‘panic situation’ in the Ministry of Finance and the word ‘bottom line’ is being used for seeking an emergency $6-7 billion in IMF assistance to make timely repayments and tackle the looming balance of payments crisis.
In the absence of any credible economic team, two officials – Talib Balouch and Khaqan Najeeb – are considered ‘opening batsmen’ of the finance ministry to take important decisions.
One is calling for seeking IMF assistance to ward off the impending balance of payments crisis while the other is suggesting acquiring commercial loans continuously at high mark-up.
Since the World Bank and the Asian Development Bank (ADB) have linked their annual assistance to the IMF’s signal, seeking commercial loans, particularly from China and Chinese commercial banks, are seen a viable option to manage external inflows.
A total of $1.3 billion in commercial borrowing had been obtained in the last few months which also included $900 million in just one quarter. There is no strategy how to deal with the intensifying balance of payments crisis.