Economic crisis: Pakistan in talks with China, Saudi Arabia to secure $11 billion
Pakistan is in talks with China and Saudi Arabia for $11 billion to secure an IMF bailout and avoid a full-blown economic crisis.
Pakistan’s caretaker government is in talks with China and Saudi Arabia to secure $11 billion, according to a recent report by DAWN newspaper. This move aims to keep the International Monetary Fund (IMF) bailout programme on track and avoid a full-blown economic crisis.
Dr Shamshad Akhtar, the caretaker Finance Minister, revealed in a policy statement that the government was working on an economic revival blueprint. Although limited in its power to execute deep-seated structural reforms, the caretaker government pledges to fulfil IMF conditions to unlock a $700 million loan instalment. The discussions with the IMF are slated to begin by October end.
Also Read: 75 years after independence, 40% of Pakistanis live below the poverty line; and its economic model is not working
Dr Akhtar pointed out, as per DAWN, that it was crucial for Pakistan to fulfil its commitments under the IMF programme for the sake of economic continuity. In June, the IMF already agreed, in principle, to a nine-month Stand-by Arrangement worth about $3 billion with Pakistan.
The finance minister also touched on the external financing gap. Despite its current initiatives, Pakistan's financing needs surpass the available funding. The government is hopeful that combined efforts with stakeholders will attract project pipeline disbursements and resuscitate policy-based financing from multiple international bodies.
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“To meet the external financing requirements, we are working to secure concessional funding from multilaterals (World Bank, Asian Development Bank, Islamic Development Bank) of $6.3bn,” DAWN quoted the minister as saying.
Amid these financial arrangements, the finance minister sent out a cautionary note. She flagged the escalating international commodity prices, notably Brent crude oil, which surged to $95 per barrel this September, as a significant risk to Pakistan's external stability.
Also Read: Pakistan begging for funds while India has reached Moon: Nawaz Sharif
The caretaker government isn't merely looking outward for financial relief. It's focusing inward too, pushing for amendments in tax laws to include retail, agricultural, and real estate sectors effectively. A further ₹3 trillion is expected to be generated by resolving pending court cases.
Read the complete report on DAWN.
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First Published:29 Sep 2023, 02:44 PM IST
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