Islamabad, Sept. 18 (ANI): The International Monetary Fund (IMF), ahead of its first round of meetings with Pakistan in Dubai on September 25, is skeptical over Islamabad's capacity to repay its 11.3 billion dollar loan.
The IMF has shown its skepticism over Finance Minister Dr Abdul Hafeez Shaikh's ability to deliver upon debt commitments following the government's failure to implement crucial reforms under the last bailout programme, reports The Express Tribune.
Pakistan's exposure to the 11.3 billion dollar IMF loan has also obligated the country to hold post-programme monitoring exercises, aimed at keeping a close watch on the economy. This will be the first formal monitoring mission of the IMF.
During the week-long technical discussions, IMF authorities will review Pakistan's ability to pay back a remaining debt of approximately eight billion dollars. A significant chunk of that amount, 2.9 billion dollars, will be repaid during the current fiscal year 2012-13, out of which Islamabad has already paid 395 million dollars in the first quarter.
Sources in the finance ministry said the country was currently enjoying a relatively comfortable position on the external front. However, they conceded that financing the current account deficit-gap between external payments and receipts remained a challenge, adding that it would likely be one of the thorny issues between both sides.
The government is going to present an estimated current account deficit of 3.2 billion dollars or 1.3 percent of the Gross Domestic Product (GDP), sources said. The projections are lower than depicted in the Annual Plan 2012-13, unveiled with the budget just three months ago. In the annual plan, the government had shown a current account deficit of roughly 5 billion dollars or 1.9 percent of GDP, according to official documents.
There has been a long held view by independent experts and leading international lending agencies that Pakistan will have to seek a second bailout programme from the IMF by end of 2012 or before close of this fiscal to honour its international debt obligations. However, finance ministry officials are of the view that the decision to enter into the second programme will be dependent on global oil prices. (ANI)
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