ISLAMABAD
\nThe All Pakistan Business Forum (APBF) has termed the IMF deal with Pakistan as a positive development for the economy but warned that Pakistan\u2019s liquidity risks remain high in spite of the staff-level agreement with the International Monetary Fund for a Stand-by Arrangement of $ 3 billion for a nine-month period, as this bailout alone can\u2019t put economy back on track.
\nAPBF President Syed Maaz Mahmood said that that the multilateral donors financing might not bring any significant impact on struggling economy, as the sustainable solution to Pakistan\u2019s economic issues lies in the structural reforms and consistent policies.
\nHe said that the obvious reason: 4,069 million dollar foreign exchange reserves are simply not enough to meet even one month of imports, 3.68 billion dollar estimated decline in remittance inflows, clocking at 24.8 billion dollars July-May 2023 compared to 28.48 billion dollars during the comparable period the year before.
\nBesides this decline in exports, home remittances by the Pakistanis abroad, the other desired form of foreign exchange earnings, also fell from 31,782 million dollars during July-June 2022 to 27,744 million dollars in 2023.
\nAPBF chairman Ibrahim Qureshi said that the deal would end speculation of a possible default, but the country\u2019s debt troubles won\u2019t end there, as the more IMF aid will be needed in 2024, he added.
\nHe said that the rupee will strengthen which will reduce inflation, so, the IMF agreement is overall a good development.
\nIbrahim Qureshi expressed his opinion on the agreement with the International Monetary Fund and said that there is positive news at the beginning of the new fiscal year, as it was not expected but the agreement was reached. Now the rupee will strengthen, which will reduce inflation.
\nMaaz Mahmood said that there is a 9-month agreement which is very positive, as the caretaker government will remain in the facility, however, the IMF conditions have increased the cost of production. He said that government will make payments to exporters when fiscal space is created. He said that Pakistan is likely to avert default this year, as the country managed to secure a last-minute International Monetary Fund (IMF) bailout.
\nSyed Maaz Mahmood said The funding from IMF would also unlock another $3 billion in loans pledged by Saudi Arabia and the UAE, he said.
\nTogether, the loans should allow the country to repay its debts through April 2024, assuming that the current account deficit for the fiscal year comes in below $4 billion as the central bank projects, he said.
\nHe projected that Pakistan dollar funds could rise up to $9.5 billion on account of inflows from the IMF and friendly nations.
\nHowever, this won\u2019t be enough to repay $8.7 billion in loans (net of rollovers) in the year starting July and also pay the country\u2019s import bills for the full fiscal year.
\nThis means whoever is in power after elections in October will have to negotiate a new deal with the IMF. The upcoming government would need to adhere to measures agreed with the IMF to secure another program next year, said the report.
\nHe said the decision to take more loans will keep complicating the problems in longer term, as the government needs $23 billion in foreign debt repayments for this fiscal year, which is the direct result of such decisions of taking loans from foreign nations.<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD The All Pakistan Business Forum (APBF) has termed the IMF deal with Pakistan as a positive development for the economy but warned that Pakistan\u2019s liquidity risks remain high in spite of the staff-level agreement with the International Monetary Fund for a Stand-by Arrangement of $ 3 billion for a nine-month period, as this bailout […]<\/p>\n","protected":false},"author":2,"featured_media":197698,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-342300","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n