Pak Govt banks on IMF for funds despite slippages

Islamabad, June 29(ANI): The Pakistan Government has decided to bank on domestic borrowing to finance the 1.08-trillion-rupee budget deficit after its hopes of receiving 1.2 billion dollars through international bonds and Coalition Support Fund (CSF) disbursements failed to materialise, a senior official has said.

Despite these slippages, the government expects to get a tranche of 1.6 billion dollars out of the remaining 3.5 billion dollars from the International Monetary Fund (IMF) under its 11.3-billion-dollar standby arrangement suspended since May last year.

The government also expects to get a favourable letter of comfort from the IMF on the country's macroeconomic developments to help persuade other lending agencies to keep external funds flowing.

The current financial year will close with a deficit of 5.3 per cent of the Gross Domestic Product (GDP), while 120 billion rupees provided to the power sector as one-off measure would not be treated as a part of the regular fiscal deficit.

Rana Asad Amin, the Finance Ministry's Additional Secretary and official spokesman, said that the Pakistan authorities and the IMF staff would meet in the third or last quarter of the next year to review Islamabad's macro-economic performance during the current year and projections for the next year, the Dawn reports.

He expressed hope that the talks would be successful, enabling the IMF staff mission to request the executive board for the disbursement of 1.6 billion dollars and the issuance of a letter of comfort that would certify that Pakistan's "macro-economic framework is workable" and needs to be supported. (ANI)