IMF, not Pakistan, abandoned loan programme: report

Pakistan

IMF, not Pakistan, abandoned loan programme: report

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Contrary to finance ministrys claim, it was IMF that refused to lend money to Pakistan.

18 September,2011 08:28 pm

Earlier, the ministry said Pakistan did not need more loans from IMF, but well-placed sources reveal IMF refused to continue loan facility for not fulfilling the conditions set by the world financial body. Eight out of 9 programmes proved failures, reported the Dunya News.IMF approved a loan facility worth $ 11.30 billion in 2008, out of which Pakistan got $ 7.6 billion. The programme was suspended in 2010 for not fulfilling IMF conditions. IMF extended the programme for 9 months but Pakistan could not obtain the remaining $3.70 billion. The main bottlenecks between IMF and Pakistan were non-implementation of VAT, lack of reforms in power sector and the ballooning deficit which went up to 5.9 percent, while the mutually agreed one was 4.7 percent. The government is confident to reduce current account deficit through increase in exports and remittances. Experts fear flood losses coupled with cotton crop destruction may wreck havoc with Pakistan’s economy.