IMF to hold meeting on July 3 to examine $6 billion bailout package for Pakistan
In this regard, Pakistan has accepted all terms and conditions of the global moneylender.
KARACHI (Dunya News) – The International Monetary Fund (IMF) Board is scheduled to meet in Washington on July 3, 2019, to consider three-year ‘extended fund facility’ of $6 billion for Pakistan.
Sources familiar with the matter told the media that Pakistan has adopted a tight monetary and fiscal policy stance based on all terms and conditions of the global moneylender in order to secure a three-year bailout package.
The bailout package will help Pakistan to pay its external debts, recover from its fiscal deficit, keep foreign exchange reserves to the equivalent of 3 months of imports and curb further devaluation of the rupee.
According to analysts, financial assistance from ‘friendly’ countries has not proven to be enough for the government to recover from the current financial crisis.
They are of the view that chances of Pakistan securing the bailout package are high as the country has accepted all terms and conditions; however the deal would have adverse effects on its economic growth.
Fitch Solutions, a US-based global research house, has revised down Pakistan’s economic growth to 2.7% for the next fiscal year 2019-20 from a previously quoted estimate of 4%.
In the report, experts opined that higher taxes will erode the purchasing power which in turn would slowdown consumption growth to 5.3% in FY20, down from 6.3% in FY18.
The consumption currently stands at around 82% of the GDP.
“Given our expectations for continued upside pressure on consumer prices over the coming months, we believe that the consumers’ purchasing power will continue to fall over the coming months, thereby weighing on consumption,” says Fitch.
