Pak Finance Minister says IMF mission visiting at April end, to sign USD 6-8 billion bailout deal

Umar announced that an IMF mission will visit Islamabad during the last week of April, which is when the bailout package amount will be finalized, reports said. He claimed that all the major issues have been settled and documented .

Pakistani Foreign Minister Shah Mehmood Qureshi (C) speaks next to Defence Minister Pervez Khattak (L) and Finance Minister Asad Umar (R) during a press conference at the Foreign Affairs Ministry in Islamabad on February 26, 2019, following the Indian Air Force (IAF) strike launched on a Jaish-e-Mohammad (JeM) camp at Balakot. (Photo by AAMIR QURESHI / AFP)

New Delhi: Pakistan Finance Minister Asad Umar has said that the country is set to sign a USD 6-8 billion package with the IMF, which he claimed would visit the country during the last week of April, media reports in Pakistan said. The announcement by Umar come as the cash-starpped country tries to come out of a severe balance-of-payments crisis that threatens to break its economy. Umar announced that an IMF mission will visit Islamabad during the last week of April, which is when the bailout package amount will be finalized, reports said.  He claimed that all the major issues have been settled and documented . He said the International Monetary Fund package would ease off pressure from the country's dwindling foreign reserves. "We have reached an agreement and all the major issues have been settled and documented," Umar told a meeting of the National Assembly's Standing Committee on Finance and Revenue on Monday after a visit to the US. External account pressure reduced Pakistan's international reserves to USD 6.6 billion by mid-January 2019, but with short-term financing from Saudi Arabia, the United Arab Emirates and China, foreign reserves increased to USD 10.5 billion at the end of March. The finance minister later told journalists that the bailout package with the IMF had been "agreed upon in writing and we have an agreement on all policy matters." These matters included exchange rate, fiscal deficit, energy, public finance and public sector entities, he said. Umar said the exact size of the fund programme had not be concluded, adding that it would be between USD 6 billion and USD 8 billion. He said major flows would then come from the World Bank and the Asian Development Bank (ADB) that had been blocked in the pipeline owing to insufficient import cover and the absence of IMF umbrella. He said Pakistan's financing gap was around USD 15 billion while USD 7-8 billion from the World Bank, USD 6-8 billion from the IMF and ADB would be available while the process for launch of international bonds had already been started. The ADB this month forecast that Pakistan's economic growth is set to slump further to 3.9 per cent in fiscal year 2019 from 5.2 per cent in 2018, citing the "macroeconomic challenges" faced by the country. Finance Minister Umar said funds provided by friendly countries had helped create a cushion over the period to compress current account deficit. As a result, the conditions are much different now than the government was discussing with the IMF in October-November last year. He said the crisis was over now, but stabilisation would continue for sometime which could not be expedited or else the country would again be in the balance of payment problem. (with inputs from PTI)