ISLAMABAD: Before an International Monetary Fund bail out package is not approved, the PTI-led government would have to arrange $2-3 billion of stopgap financing from friendly countries in the coming weeks, to avert a deepening of the economic crisis.
According to the top officials of economic ministries privy to development,said that project financing from international donors had shrunk during the current fiscal year, because the procedural requirements for obtaining approvals from competent forums could not be fulfilled during the recent political transition.
On condition of anonymity, one of the official said that programme loan flows from multilateral creditors, including the World Bank and Asian Development Bank, had already halted due to the worsening macroeconomic situation. “These multiplying factors could lead towards a severe economic crisis.”
The IMF package approval process would require at least six-to-eight weeks, if everything goes smoothly, at a time when the foreign reserves are depleting at an accelerated pace. “We need dollar injections of $2-3 billion, and proposals are under consideration to manage financing from friendly countries, including China and Saudi Arabia,” a top official told to one of the Pakistan’s newspaper outlet.
The IMF negotiating mission is expected to arrive in Islamabad next week. It would take at least 7-to-10 days to finalise its report. The IMF staff would need a further 4-to-6 weeks to circulate the report to members of Executive Board of the IMF. “We cannot get approval from the IMF before end-November or early December, so we desperately need to arrange stopgap financing to avert a full-blown crisis on the exchange rate front,” an official said.