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Tuesday, May 21, 2024

The interior ministry has said that Pakistan would not get a loan from the IMF despite the country’s efforts to “dance to its tune”

Rana Sanaullah, the Minister of the Interior of Pakistan, said on Sunday that the International Monetary Financing (IMF) had not given the tranche for the USD 6 billion rescue package that was included under its extended fund capacity, despite the fact that it had forced Pakistan “dance to its song.”

In response to a query on the IMF, Sanaullah said that the government had agreed to the conditions, despite the fact that “we were not in favour of them.” According to Geo News, he also pleaded with the international lender to immediately release the tranche so that the government could extricate itself from the “tough position.”

According to the federal minister, Pakistan’s economy is now through a challenging condition.

Sanaullah continued by saying that “for the benefit of the nation, we have to make painful choices.” As a result of these decisions, “the country is moving towards improvement.”

Sanaullah said, in reference to the regime that was headed by Pakistan Tehreek-e-Insaf (PTI), that the nation was dominated by a gang that “did nothing but carry out a vendetta.” Sanaullah was referring to the previous administration that was run by PTI.

In the meanwhile, Pakistan had planned to borrow Pakistani Rupees (PKR) 5.5 trillion from overseas lenders during the current fiscal year in order to keep their foreign currency reserves intact, repay the loans they had taken out in the past, and fund their current account deficit.

Previously, in the yearly budget for 2022-23, the Pakistani government had predicted that they would only borrow a total of 3.17 trillion Pakistani Rupees from outside sources. However, the budget did not account for the funding that was provided by the International Monetary Fund (IMF), Saudi Arabia, or the SAFE China deposit, according to a report from a Pakistani publication called The Nation.

After taking into account the funds from the aforementioned sources, the total amount of the anticipated overseas borrowing has climbed to PKR 5.5 trillion at this point.

This fresh round of borrowing will result in an increase in the total amount the government owes that is 74% greater than their earlier projections. Following the adjustment, it is anticipated that the foreign resources would amount to 5.503 trillion Pakistani Rupees in 2022-23. This figure is more than 200 percent more than the original 2.7 trillion Pakistani Rupees that were planned for 2021-22.

According to The Nation, the present administration is having trouble accumulating sufficient funds to purchase currencies, and it will need an additional USD 41 billion in funding from outside sources in the next fiscal year.

In the upcoming fiscal year, the government will be required to repay the previous loan in the amount of USD 21 billion. It is anticipated that the current account deficit will be USD 12 billion, and an additional USD 8 billion will be required to bring the total amount of foreign exchange reserves up to USD 18 billion.

As a result, the government intends to take out a substantial amount of debt during the current fiscal year.

David Faber
David Faber
I am a Business Journalist of The National Era
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