ISLAMABAD: With a huge repayment of over $5 billion approaching in the nextsix months, Pakistan may be compelled to take a bailout package from theInternational Monetary Fund (IMF).
According to sources, repayment of over $700 million would be made tomultilaterals from January-June 2019, which includes over $500 millionprincipal amount and around $200 million interest payment. Bilateralrepayments are projected at over $1.2 billion – over $1 billion principalamount and around $200 million interest payment, they added.
Pakistan would be required to make over $2 billion worth repayments to thecommercial banks, including $1.9 billion principal amount and around $150million interest payment. Moreover, the government would have to pay over$1.2 billion on account of bonds with $1 billion as principal amount and$251 million interest payment.
Sources said that Pakistan had paid approximately $3.6 billion in the firstsix months of the current fiscal year, including $1.7 billion multilateralrepayments, $740 to million bilateral, $870 commercial banks and $260million on account of bonds.
Overall, Pakistan is bound to repay around $9 billion in the ongoing fiscalyear 2018-19. The incumbent regime has been striving hard to fetch moreloans from friendly countries as well as from the IMF.
Pakistan has so far been able to receive $3 billion from Saudi Arabia and$1 billon from the United Arab Emirates (UAE). Sources said that theremaining $2 billion from UAE would be deposited in the central bank in thecoming days, which would help increase the country’s reserves.
In addition, sources said, China is also giving 15 billion yuan ($2.2billion) to Pakistan in a bid to boost the country’s reserves.
The incumbent team has been in continuous touch with the IMF team sinceNovember last year but both the parties failed to reach a common ground.
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It is pertinent to mention that Pakistan’s foreign reserves rose to $8.1billion through the assistance of Saudi Arabia.
According to independent economists, the incumbent government shouldimmediately take assistance from IMF, as it would improve Pakistan’sfinancial position in the eyes of international lending organizations.
Leading economist Dr Salman Shah noted that the government is borrowingmore money to repay the existing loans.
“This is worrisome,” he said. “We do not have any other option but to go toIMF, as the current account deficit is around $18 billion and approximatelya repayment of $10 billion is also scheduled in this fiscal year.”
He advised the government to strike the deal with IMF as it would certainlylessen the existing burden on the government.
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