ISLAMABAD: Prime Minister Imran Khan will meet International Monetary Fund (IMF) chief Christine Lagarde in Dubai on Sunday for talks on issues which have held up bailout negotiations, a Pakistani minister said on Saturday.
Pakistan is seeking its 13th bailout since the late 1980s to deal with a current account deficit that threatens to trigger a balance of payments crisis, but talks have been delayed by difficulties in reconciling IMF reform demands with Islamabad’s fears the push is too drastic and could hurt economic growth.
Information Minister Fawad Chaudhry told Reuters that Khan will meet Lagarde on the sidelines of the World Government Summit in Dubai. “This will give us a chance to understand the IMF views and we will be able to give our version to (Lagarde),” said Chaudhry, who will accompany Khan to Dubai along with Finance Minister Asad Umar.
Chaudhry said Pakistan wants any agreed bailout package, which would be the country’s second IMF bailout since 2013, to be the nation’s last such economic rescue by the IMF. Officials had expected talks to conclude in November but they have been delayed as Islamabad harbours concerns that the programme could derail the economy and Khan’s plans for his term in office.
Pakistan has in the meantime sought financial assistance from Middle Eastern allies such as Saudi Arabia and the United Arab Emirates, who have loaned it in excess of $10 billion to ease the pressure on its dwindling foreign currency reserves.
“The problem is not the (IMF) deal, the problem is the condition attached to the deal,” Chaudhry said. “We don’t want conditions that hurt Pakistan’s growth prospects. We want a fair deal that can actually help Pakistan in the short-term, without affecting our long-term economic goals.”
The IMF talks come amid a worsening macroeconomic outlook, with growth expectations slashed for the current fiscal year to about 4% from 6% previously forecast. On Saturday, Pakistan also revised its growth figures for the last financial year to 5.2% from a previously reported 5.8%, after a sharp cut in the figure for large-scale manufacturing, the statistics office said. When the original estimate was reported in April by the government of Prime Minister Shahid Khaqan Abbasi it was hailed as the strongest growth in 13 years.
Before the revisions to last year’s GDP figures, Pakistan’s deficit-to-GDP ratio, estimated at 5.8% in 2017-18, was expected to hit 6.9% this year, according to IMF data.