Murtaza Syed says Pakistan may need another IMF programme in June

The ex-SBP governor says Pakistan has faced the worst-ever economic crisis

Bloomberg - Pakistan will require another International Monetary Fund (IMF) programme in June 2023, given its massive external financing needs and debt repayments, said former State Bank of Pakistan (SBP) deputy governor Dr Murtaza Syed the other day.

He stressed that this was the worst economic crisis the country had witnessed in its history.

Talking to Bloomberg TV, the former SBP deputy governor said Pakistan has “$10-12 billion due in debt repayment over the next six months and $35 billion worth of annual external financing needs for next three years. We will need another IMF programme after June.”

When asked if Pakistan was ready for a hard reset, Syed said that it will be difficult given the already deteriorating macroeconomic indicators but “we have seen other countries do the right thing after suffering economic crisis similar to the one being suffered by Pakistan right now and that’s what gives me hope.”

“This is the worst economic crisis in history steered by domestic and global reasons,” he added.

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According to him, Pakistan needed immediate debt relief. He said the country has to make lofty debt repayments and cannot make fiscal adjustment without debt relief.

He was of the view that the common man would be burdened beyond capacity if Pakistan failed to secure relief.

“If this issue is not resolved, then there will be a lost decade for Pakistan,” he said.

Syed, who also briefly served as SBP’s acting governor, said the IMF was close to resuming its bailout programme for Pakistan as the government has completed the pre-requisites after passing a “difficult” mini budget.

He foresaw the global lender releasing the next tranche soon.

“IMF asked Pakistan to pass on the increase in prices of fuel and electricity to consumers which is hurting the common man through spike in inflation. Despite IMF chief’s insistence on imposing higher burden on those who can bear it, the whole population is bearing the pressure.

“There is a cash transfer programme that covers 9 million people only while poverty impacts 90 million people in the country so it will be tough for Pakistan going forward.”